PREMISE OF VALUE Definition

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PREMISE OF VALUE is an assumption regarding the most likely set of transactional circumstances that may be applicable to the subject valuation; e.g. going concern, liquidation.

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LEMON is a. an investment with a poor or negative rate of return or a purchase made where the product has continuing problems, e.g. a lemon of an automobile; or, b. an asset that is in continual need of repair, e.g. an automobile can be referred to as a lemon.

REPLACEMENT COST is the total cost at current prices of an asset that is not necessarily an exact duplicate of the subject asset but serves the same purpose or function as the original.

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