Questions: Patents and trademarks are examples of intangibles.
Transcript text: Patents and trademarks are examples of intangibles.
Solution
Answer
The answer is intangibles.
Explanation
Option 1: Book value
Book value refers to the value of an asset as it appears on a company's balance sheet, which is calculated by subtracting depreciation from the asset's original cost. Patents and trademarks do not fit this definition as they are not physical assets.
Option 2: Heuristics
Heuristics are mental shortcuts or rules of thumb that simplify decision-making processes. Patents and trademarks are legal protections for intellectual property, not decision-making tools.
Option 3: Discounted cash flows
Discounted cash flows (DCF) is a valuation method used to estimate the value of an investment based on its expected future cash flows. Patents and trademarks are not valuation methods; they are types of intellectual property.
Option 4: Intangibles
Intangibles are non-physical assets that have value due to the rights and privileges they confer. Patents and trademarks fall under this category as they represent legal rights and protections for intellectual property, which do not have a physical presence but hold significant value for businesses.