To have value, an asset must provide at least annual cash flows? a. True b. False I think it is: a.?

Answer 1

False.

Although some assets might generate cash flow, annually or otherwise, many are held for the appreciation in value and may not generate any cash flow until sold.

A stock that doesn't pay any dividends would be an excellent example of an asset that doesn't generate any cash flow but still has value.

Answer 2

A house is an asset, and it provides NEGATIVE cash flow. It is one of the few assets that most people own which is taxed every single year, rather than just once. And equally appalling and obscene, this property tax increases every year, based on the so-called value of your house. Also, most assets such as bonds or stocks do not require that you spend thousands if not hundreds of thousands of dollars over the course of your ownership to maintain it, as is the case with a house. Your house wants to rot, decay, fall down, and sink into the ground from the moment it is built.
Sure, when you sell your house, you will likely sell if for more than you initially paid for it. But the negative cashflow and interest over the course of 30 years erases all of that profit and more.

Answer 3

I would have to say false. A house in considered by most to be an asset and yet it is an expense. Not all property appreciates and some even depreciate depending on the market.

Rare Art would be an asset and it would not provide cash flow unless you sold it or leased it to a museum.

Answer 4

false. An asset could be a house or building or something that doesn't return income.