Question

In: Finance

draw and describe the attributes of a perfect asset

draw and describe the attributes of a perfect asset

Solutions

Expert Solution

Asset

Asset means any visible/invisible thing/right that is used to generate money. Assets are shown at one side of the balance sheet. Liabilities are the sources which helps buy assets. Assets are of mainly two types: Fixed and Current. Fixed assets means once purchased, they'll last for a long term and will generate income for a long time. Current assets are those which gets converted in to cash with in a year like debtors/short time investments etc.

Below are some attributes of a perfect asset:

1. Can be visible and Invisible: Assets can be in the form of visible and invisible. For example goodwill is an asset which is invisible and Building is an example of a visible asset.

2. Liabilities are the source: Liabilities are the sources which help to buy asset. The company collects money/funds in the form of liabilities and then invests in assets. For example share capital is a liability and the company buys Land from share capital's money is the asset.

3. Assets are used to generate Money/Capital: Assets like machinery, land & buildings are used to do daily operations of a company which results in its revenue.

4. Depreciation is Charged on Material and Visible Assets: Depreciation means the value of asset which gets reduced by its usage. It is charged on material assets like machinery/ land/ buildings.

5. Capital Budgeting Techniques used to buy Assets: A number of Financial techniques are available to calculate the worth and profitablity of investing in assets. Companies use these techniques to evaluate the worth of investing its money in different assets/projects and that project is chosen which provides the company with maximum benefits. Some examples are: NPV; IRR etc.

Conclusion

A Perfect asset is that asset which can generate revenue for a company. Every asset gets depreciated with the passage of time but a perfect assets generates more revenue than its cost to a company. So, in small words a perfect asset is that which can pay its worth to a company in minimum time.


Related Solutions

Compare and contrast the key attributes of perfect competition and monopoly. Give examples of both market...
Compare and contrast the key attributes of perfect competition and monopoly. Give examples of both market structures (be creative). Explain why monopoly is less socially efficient than perfect competition. If monopoly is less socially desirable, why does the government allow monopolies to exist? Explain.
Compare and contrast the key attributes of perfect competition and monopoly. Give examples of both market...
Compare and contrast the key attributes of perfect competition and monopoly. Give examples of both market structures. Explain why monopoly is less socially efficient than perfect competition. If a monopoly is less socially desirable, why does the government allow monopolies to exist? Explain.
Compare and contrast the key attributes of perfect competition and monopoly. Give examples of both market...
Compare and contrast the key attributes of perfect competition and monopoly. Give examples of both market structures (be creative). Explain why monopoly is less socially efficient than perfect competition. If monopoly is less socially desirable, why does the government allow monopolies to exist? Explain. (minimum 200 words)
Describe the attributes of an experimental research design.
Describe the attributes of an experimental research design. Then, decide whether each of the following topics could be studied using an experimental research design and then explain why or why not.
Draw an EERD for the following situation. Students are required to turn in assignments. Attributes of...
Draw an EERD for the following situation. Students are required to turn in assignments. Attributes of STUDENT include StudentID (identifier), Name, and Major. Attributes of ASSIGNMENT include AssignmentNo (identifier) and DueDate. The grade obtained by each student for each assignment is recorded. Assignments may be either modeling or computer assignments. Computer assignments have an additional attribute, PlatformUsed. Modeling assignments are based on cases. A case may be used in one or more modeling assignments, and a given modeling assignment is...
Draw an ER diagram with these attributes ( ER diagram for SQL for a library database)...
Draw an ER diagram with these attributes ( ER diagram for SQL for a library database) DRAW ER DIAGRAM AS ONE FULL LIBRARY SYSTEM, NOT DIFFERENT FOR EACH ATTRIBUTE. Attributes :           Customer Cust_ID: key identifier, required, simple, single valued Cust_Name{ first name, last name}: Key Identifier, simple;composite, multivaried   Address{street, city,zip,state}: Customer address, required, composite, single can be derived from zip (placeholder, there should be another attribute here to represent the books taken out by the customer. Not sure.)           Inventory Book_ID:...
Describe caring attributes of the culture where you currently practice. Which attributes stand out as having...
Describe caring attributes of the culture where you currently practice. Which attributes stand out as having significant influence on patients, nurses, and other healthcare professionals? How do you see effective communication relating to patient outcomes in this setting? What is the evidence for this?
Ludwig von Mises gave ten different attributes of classic liberalism. identify and describe three attributes of...
Ludwig von Mises gave ten different attributes of classic liberalism. identify and describe three attributes of classic liberalism, as described by Mises. Identify and explain one attribute of modern day liberalism that is contrary to classic liberalism. Why is that role contrary to classic liberalism, as described by Mises?
A. Draw the causal network for Newcomb’s Problem with perfect detection and use it to explain...
A. Draw the causal network for Newcomb’s Problem with perfect detection and use it to explain why the following argument is valid or not; where the guaranteed money in the clear box is denoted by L and the larger amount of money that might be in the black box is denoted M. “Once a given amount of money is put into the black box, it is irreversibly fixed no matter how many boxes Adam might open in the future. “So...
Describe each of the three attributes of the transnational HRM system.
Describe each of the three attributes of the transnational HRM system.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT