> * If you spend $400M and build an asset that is worth >$400M, then you have increased the value of the company without modifying profit. For example, if a company were to buy land, and build a building, that building has a value regardless of if it is associated with any revenue*
Why does it have value? It’s because it can be rented, occupied for productive use or sold to someone who can do either of those. Revenue-free assets are essentially money. (Companies aren’t in the business of non-revenue non-monetary assets—that’s the domain of society at large.)
Why does it have value? It’s because it can be rented, occupied for productive use or sold to someone who can do either of those. Revenue-free assets are essentially money. (Companies aren’t in the business of non-revenue non-monetary assets—that’s the domain of society at large.)