Complete the sentence

1. Physical assets appear in a balance sheet as fixed assets.

2. Physical assets that might bet involved in the following businesses

Physical assets are the equipment, properties, and inventory. They can also be called as tangible assets.

A motel with a restaurant: May have the following assets: 1) Kitchen equipment, 2) Cash registers, 3) booths, 4) building, 5) computer equipment, 6) Furniture, 7) Beds, 8) Carpets, 9) refrigerators, 10) Laundry and Drying equipment, 11) Food

A bus tour business: 1) computer equipment for data storage, 2) Deports, 3) Buses, 4) Furniture, 5) An intercom system, 6) Speakers. 7) Motorcycles, 8) non-emergency ambulances

A caravan park: 1) A picnic table, 2) land. 3) Buildings such as toilet and Laundry block, 5) Tents, 6) Land, 7) Flat screen TV, 8) Beds, 9) Shopping equipment, 10) Carpet

A clothing retailer: 1) Furniture, 2) Building, 3) Computer equipment, CCTV camera, heating, and air conditioning equipment

3) The statement is false. This is because Goodwill is mostly being considered as noncurrent or intangible assets and it is not a physical asset such as equipment and buildings. They are noncurrent asset that arises when one buy and obtain possession of an existing company. For it to be recorded as Goodwill, the purchase price must be higher than the net of or combination of 1) the assumed liabilities and the fair value of intangible as well as tangible assets.

4) A profit center is a department or a business unit within a company that generates revenues as well as losses or profits. Management strictly monitors the outcomes of profit centers, because these units are the major drivers of the total results of the parent entity. It’s a business unit that uses organization resources to make income. It is a department that creates sales or earns money for the business. Those that are involved in the management of the Profit center like the manager has the power of making decisions regarding the expenses to be incurred, and how revenue should be earned. A profit center in the business may include sales or selling department (Miller, Goore, Uddenberg and Crowther 2016).

5) Marketing or sales departments are well-known forms of revenue centers both in large or small businesses. The marketing department is responsible for selling services or products that the organization produces. For example, food and beverages segment and rooms department are the revenue department of a hotel.  

Other example: in a five-star hotel: Rooms division, Lounges, Restaurants, Banqueting facilities, Room services, Bars, Laundry, Valet parking, Newsstand, Telephone and Gift shops.

What physical assets might be involved

6) It would not be possible to calculate Return on investment for each business unit (profit center). This is because the calculation of Return on investment is done by comparing Costs and benefits. Therefore, the calculation of ROI does not require the use of profit instead cash should be used to get the true result.

7)  The main function of the business includes:

• Production function: this is the creation of services and goods with the assist of certain processes. In this department there is a production manager that performs the following: ensure production of commodities in specified quantities, perform all operations regarding production at the low cost.
• Marketing function: This is the actual process of obtaining commodities (good and services) from the consumers with the aim of satisfying the desires and needs of producers and consumers. It establishes a process whereby consumers and producers are joined together for exchange and this lead to the transfer of ownership.
• Finance function: this is responsible for three main decisions as well as their correct implementation. The decisions include financial decisions, investment decisions, and dividend decisions. Business has to ensure that its correlation with the financial markets such as institutions as well as other major shareholders is strong.
• Human Resource function: it helps in increasing the performance of the human in any firm. (HR) function mostly deal with Human resources of the business. It helps the organization with increasing the speed of human performance. The function of the Human Resources is motivating the employees, and maintaining effective workforce.
• Information function: Efficient information is necessary for the management of the modern business.  The information function is mostly concerned with records. The preparation of the records allow for the collection of a lot of information. Thus, the information function performs following: generate, communicate, and collect information for the purpose of policy formulation and decision making.
• Innovation: this is the adoption of creativity in the business. It can facilitate the development of the products. It is the implementation of significantly or new improved good or services product), or process, workplace organization, a new marketing technique, and a new business practice. Therefore, innovation, which is also called creativity has essential role in the business and the organization needs to implement it. Innovation is also useful because it enables the management and the entire staff to think outside the box.

The main functions of asset management are: Help in the provision of inputs to the planning of asset, taking the role in key development, acquisition and providing the facilities and systems to support assets, financing the economy: Asset managers are assisting governments and corporation meet their long-term funding needs.

8. Steps in the business planning model, which might apply to a proposal to purchase a new tour bus.

• It should start from an overview of the business experience:  it starts with the planning process with information regarding the business that an entrepreneur wants to develop. Analyze and research the kind of the tour bus to be purchased, your objective and the market. Consideration should be put into spending much time evaluating and researching. The perfect plan will require an individual or organization to know more of the product (Tour bus), competitors in the market as well as market intimately.
• Determination of the business idea; in this step as an entrepreneur it is essential to state the nature of the business you as individual want to take — this help in providing direction to the business on how it can plan for the future use of the Tour bus.
• Business environment: The next step is the identification of the legal, social, economic, political and environmental realities that may affect the business (Tour bus business). Detailed information on visitors spending habits, travel industry trend, as well as demographics, should be documented. These will enable each and everyone to know the kind of the business.
• Market strategy: The tour bus must then abide by the theory of keeping its customers happy by developing a strategic marketing plan. For example, the Tour bus must enter new territories and find out where there is a gap in the market. It must identify its customers and then try to build the reputation of the business.
• Risk management: the major risk that can affect the tour business should be identified, and then plans should be established on how to avoid and mitigate them. Safety should be given to drivers and all the staff.
• The next step is financial planning: an early consideration of the financing is also an essential factor of any successful development. Looking at the business requirement of the entire project is essential.
• After the development of the business concept, it is crucial to accurately develop and examine the risk management strategy and an individual strategy.

9. The four stages of asset management are:

• Planning: this stage verifies and establishes asset requirements
• Acquisition: The activities that are involved in this stage are purchasing of an asset. It covers activities like procuring and designing an asset.
• Operation and maintenance: This stage specifies the management and application of an asset.
• Disposal: This is the last stage. This is where an organization may decide to treat an asset as surplus. The company may decide to dispose of an asset if the asset is underperforming.

10. This is a management technique that ensures that there are the distribution and sharing of the managerial burden as well as power with all the subordinates. The example is a situation where the Manager delegates some of the power of decision-making process to their subordinate. Another example is that instead of them as the manager setting the task’s deadline that they have created, they inform the team to do the work. For the management to ensure that there is effective delegation, then they have to delegate the work to the right person, and the proper task should be transferred to the right individuals.

11 A planning gap refers to a concept that the organization is using in clarifying the extent of profits or revenue gap that might be created if the new (current) strategies do not change. It may also refer to unformulated plan which enables for flexibility as well as the injection of other developments that could improve the current approach.

12. A physical asset proposal might concern major project development proposals  

13. SWOT analysis is a technique of strategic planning used to evaluate competitive of a person or organization by identifying its weaknesses, strengths, threats, and opportunities. Specifically, it is a model of a foundational assessment that measures what an organization or a person can and cannot do, as well as its potential threats and opportunities. This is the type of the research or analysis that an organization will study to find about other competing company. The research enables the organization to learn about their competitors.

14. The five steps in the product development process are:

• Idea generation; at this stage the product team establish new ideas for the commodities by competitive products.
• Screening: this is where the generated ideas pass through a screening process to remove the viable ones. In this stage, the business has to get opinions from customers, businesses, and workers to prevent the pursuit of expensive unfeasible ideas.
• Concept testing:  This is done immediately after idea screening. The business carries out research to identify the potential revenue, profits and revenue arising from the commodities. The business has to perform a SWOT analysis with the aim of identifying the weakness, strength, threats, and opportunities that are in the market.
• Business Analytics: A system of metrics should be established to monitor progress in the organization.
• Product development: it involves the actual manufacture and design of the product.
• Test marketing: it involves launching beta versions and organizing for private tests groups

Goodwill qualifies as a physical asset?

15. A schedule listing the items that make up the balance for a fixed asset line in a balance sheet is derived from an

16. The two types of source documentation for an asset register include:

•    Fixed Asset Accumulation,
•    purchase date price

17. Asset monitoring is for management decision making; monitoring helps the management in making day to day decision in the organization. Example of the decisions may be on a choice between related commodities, policies decision, resources allocation, as well as decisions on design.

18. Monitoring is regular recording and observation of the fixed assets of the company for preventive maintenance, financial accounting, as well as theft deterrence purpose. It is a process of regularly collecting information on the physical assets of the business to check on how they improve the performance.

19. The two related management concepts for asset monitoring are:

Control and regulation.

20. The two types of source documentation for an asset register include:

• Fixed Asset Accumulation,
• purchase date price

21. Monitoring is regular recording and observation of the fixed assets of the company for preventive maintenance, financial accounting, as well as theft deterrence purpose. It is a process of regularly collecting information on the physical assets of the business to check on how they improve the performance.

22. Performance evaluation offers a check-up for the business and enables the management to have a good understanding of how effectively they are managing the firm. While reporting allow the firm to take stock of the business and it also enable the management to know how well they are managing the organization thereby allowing them to know if they are doing the right thing. Through reporting organization are able to set their future directions. It is true that both the performance evaluation and reporting are working at the same time. They all relate on the things that they perform to the organization. They also ensure that there are improvement in the management and efficient use of the resources (Mobley 2016).

23. The 3 component in Life Cycle Cost (LCC) analysis are:

• Acquisition costs; this may include development and design costs.
• Operating and maintenance costs; they may include cost of failure, cost of repair, and loss of production.
• The last component is the Disposal costs

24. Name the four stages in the lifestyle of a building where LCC analysis might be useful

Stage one: Design

Stage two: contract

Stage three: Approval

Stage four: Build

Q25. The economic life of a physical asset is the period of life before the asset fully depreciated; at that point, the asset no has zero financial value and no longer function.

Q26. The two types of finance company loan include:

What is a profit centre?

Equity finance: This is the investment of your funds, or money from other external bodies (stakeholders), to get partial ownership. It is a technique of raising capital by selling the stock of the Company. This in return enables the shareholders to acquire ownership of an interest in the organization (Gunckel, Márquez, Peñaloza, Rodríguez and Díaz 2018).

Debt finance: it is the money borrowed from other people (external leaders), for example, a bank. This type of financing does not provide the leader control of ownership. However, there must be interest with the principal being paid. The interest rate, security, and loan duration depend on what the invested loan is being used.

27. Environmental assessment criteria can be grouped under three main headings.

It can be grouped into the Abiotic, Biotic and socioeconomic assessment

28. According to some researchers, the cost of abiding by the environmental regulation can cause a burden that consumes the company profit. However, other holds it that environmental regulation can increase efficiency and spur innovation, eventually increasing profitability (Hepp, Wortner, Schönhals and Gipp 2018). The two ideas are true, and they are capable of creating an endless debate. As for me, the statement is false; the environmental protection usually increases profit. This is because through environmental protection, the company may sue by the government and this may make them spend the resources of the organization in the process of solving the issues in court. This, in turn, may lower the profitability of the government. Environment protection will create the conducive environment both for the business and the surrounding, and this will enable the organization to increase its performance thereby increasing the profitability of the organization. Therefore, to ensure the profitability, the organizations must ensure that there is a protection of the external environment as this will create a good relationship between the business and its customers.

29.The four main stakeholders include:

National governments; the government enact rules and regulation on the environmental protection and these policies may affect the Tourisms industry. This will, in turn, affect the Tourism asset.

Local government: Some of the local governments are also involved with the matters of tourism. They also take part in the environmental protection as it ensures that the organization abides by their convention.

The other Stakeholder may also include tourism enterprises, tourism establishment, and their association.

The last stakeholder is the organizations engaged in funding tourism projects. They will benefit either positively and negatively, and therefore they have the responsibility of ensuring that there is environmental protection.

References

Gunckel, P.V., Márquez, A.C., Peñaloza, R.T., Rodríguez, F.K. and Díaz, V.G.P., 2018. Reliability Stochastic Modeling for Repairable Physical Assets. In Advanced Maintenance Modelling for Asset Management (pp. 191-211). Springer, Cham.

Hepp, T., Wortner, P., Schönhals, A. and Gipp, B., 2018, June. Securing Physical Assets on the Blockchain: Linking a novel Object Identification Concept with Distributed Ledgers. In Proceedings of the 1st Workshop on Cryptocurrencies and Blockchains for Distributed Systems (pp. 60-65). ACM.

Miller, M.R., Goore, N., Uddenberg, S. and Crowther, E., Roundhouse One LLC, 2016. System and method analyzing business intelligence applied to physical assets and environment factors. U.S. Patent Application 15/052,096.

Mobley, R.K., 2016. Physical assets mean nothing without empowered employees. Asset Management & Maintenance Journal, 29(2), p.24.