Question

What are primary ways in which an asset can be acquired?

1) Externally by vendor
2) Internally by production
3) Externally without a vendor

Answer 1

Firms can acquire assets through early-stage investors, reinvesting profits, borrowing from banks or issuing bonds, and by selling stock. Each method has its own trade-offs and influences the firm's financial strategy.

Step-by-step explanation:

Assets can be acquired in several primary ways, outlining the methods by which a firm can obtain the financial capital necessary to secure these assets. Firms can opt for financial capital through early-stage investors, which is crucial especially for start-ups that have promising ideas or prototypes but limited cash flow.

Each way of acquiring assets implies a choice about how to pay for them, balancing the trade-offs between cost, control, and risk. The selection of the appropriate financial capital source is influenced by several factors, such as the firm's current earnings, projected earnings, and overall financial strategy.