How can a company finance fixed assets?
Fixed assets are major purchases for things like equipment, buildings, and land that are used long-term and are difficult to convert to cash. Fixed assets are listed on the company's balance sheet under "Current Assets".
Answer and Explanation:
Companies can finance fixed assets by debt financing or equity financing.
In debt financing, the company might take out a loan from a bank to pay for the assets such as a mortgage. A business can also pay for fixed assets by investing their profits into them or by selling stock in the company in a process known as equity financing.
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Learn more about this topic:
from Corporate Finance: Help & ReviewChapter 8 / Lesson 7