Selling assets

• What is the purpose of selling fixed assets?

  To raise cash via surplus assets
• How are fixed assets defined?

  Long-term assets owned for over one year
• What are examples of fixed assets?

  Spare machines, capital goods, spare vehicles
• Why is selling fixed assets considered internal finance?

  It comes from assets already owned by the business
• Why might new businesses not sell fixed assets?

  They may not have surplus fixed assets
• What are the pros and cons of selling fixed assets?

  Pros:

  • No interest payments required
  • No control given up

  
  

  Cons:

  • Limited number of times it can be done
  • Risks of not finding a buyer
  • Potential loss of fair value
  • Depreciation affects asset value
• What is a key advantage of selling fixed assets?

  No interest needs to be paid
• What happens if a buyer cannot be found for fixed assets?

  It results in slow or no cash
• What risk is associated with selling fixed assets regarding value?

  You may not receive fair value
• How does depreciation affect selling fixed assets?

  It likely reduces the asset's value
• What is a potential consequence of selling too many fixed assets?

  You may have no business left
• What is a "one-trick pony move" in the context of selling fixed assets?

  It can only be done a few times
• What should you be realistic about when selling fixed assets?

  Expectations for cash received