Question

Threadbare Industries is a new high-end textile company that has raised sufficient capital from multiple sources. It is planning to use its capital to purchase certain assets. Which of the following assets will be the most difficult for Threadbare Industries to acquire using its capital?
a. a new CEO
b. software
c. a lease for a new building
d. brand name

Answer 1

Answer:

d. brand name

Explanation:

If a company has the money, it can acquire much software that is necessary for the company. Therefore, option B is incorrect. The company can lease a new building through the capital, and a new building is a non-current asset. So, option C is also wrong. A new CEO is not an asset because the company has to pay a salary for the CEO that is an expense. So, option A is not correct.

The brand name is an asset to the company. Using capital, Threadbare Industries cannot acquire the brand name. A brand name cannot be acquired through the capital, and it can be acquired through customer satisfaction. Therefore, option D is correct.