A tangible asset is a fixed asset that has a physical existence, such as land, buildings, machinery, equipment, and inventory. These assets can be seen and touched, and they typically have a longer life and contribute to a company's long-term profitability. While patents add value to a firm, they are not considered tangible assets because they do not have a physical existence.

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A Tangible Asset

Question 9

Multiple Choice

A tangible asset:

A) is defined as any asset which adds value to a firm
B) by definition includes both equipment and patents
C) is another term for a fixed asset
D) is defined as an asset with a market value that exceeds the book value
E) is a fixed asset with a physical existence

Correct Answer: