The sum-of-the-parts analysis assumes that:

The sum-of-the-parts analysis is a valuation method that aggregates the individual values of a company's divisions or subsidiaries to arrive at a total valuation for the entire company. This approach operates on the premise that the combined value of the individual segments, when independently evaluated, can exceed the valuation of the entire company being viewed as a single unit.

Choosing the option that states individual segments have a present value higher than the combined value accurately reflects the rationale behind this analytical method. The idea is that certain segments might possess unique growth opportunities or risks that might not be fully recognized when valuing the whole entity collectively. Analyzing these segments individually allows for a more nuanced assessment of their worth, potentially revealing hidden value in the company that might be overlooked in a holistic approach.

This reasoning does not rely on the valuation of segments purely for accounting purposes or assume uniformity in returns across all segments. Instead, it recognizes the distinct economic profiles of each part of the business, which can lead to a total valuation that is more accurately reflected when analyzed separately.