If you had to decide whether or not to lend money to a company, would you use the market value of its assets or the book value? Why?
(A) Market value; it is the only method consistent with GAAP.
(B) Market value; it tells you how much the company could sell the assets for if it has to re-pay the debt.
(C) Book value; it tell you how much money they spent on assets in the past.
(D) Either; they are usually the same.