How does the Leasing reduce the upfront cash needed to use an asset?

Q: How do you calculate Fixed Asset Turnover? What is the Free Cash Flow Ratio? What is the difference…

A: The answers for the questions on accounting ratios are discussed hereunder : Fixed Assets turn over…

Q: What happens if economic engineers invest too much in assets?

A: Economic engineers always combine finance with engineering and develop various models to deal with…

Q: What are the major advantages of leasing a fixed asset rather than purchasing it?

A: A lease can be defined as an arrangement between the lessor(owner of the asset) and the lessee (user…

Q: What will be the Return from Owning versus Leasing explain with example?

A: Return from owning an asset: The first benefit of owning an asset is that individuals can use an…

Q: Explain the ways in which property owners can structure leases in order to recover operating…

A: Leasing refers to acquiring an asset from a lessor in lieu of rental payments.

Q: What entry is made when selling a fixed asset?

A: Following entry is passed when selling the fixed assets:

Q: What amount should be capitalized as the cost of the new equipment?

A: As per the relevant IFRS "PPE", all the costs incurred by the Business Entity, to bring the Asset…

Q: What is the difference between unlevered and levered cash flows? What discount rate must be applied…

A: Hi, since you have posted two different questions, we will answer the first one, as per authoring…

Q: How does Leasing offer protection against the risk of declining asset values?

A: Leasing:    The term leasing defines that it is a process of renting a property to someone the…

Q: Which of the following is not a factor in selecting a depreciation method? a. salvage value b.…

A: Depreciation is charged on cost of assets on annual basis for repair and maintenance costs and…

Q: What are the Effects of Inflation on Projects with Depreciable Assets?

A: Answer: A depreciable asset is nothing a property that gives more economic benefit over a tax period…

Q: What are the disadvantages of cutting expenses/costs and utilising trade credit insurance, when it…

A: Answer: Trade Credit Insurance is the methods that is applied by the company to protect its debts…

Q: From the following identify the cost that is not a cost of PPE? Professional fees Nonrefundable…

A: Property plant and machinery are the fixed assets of the company which helps in production process.…

Q: True or false If you sell an asset for more than its salvage value you can record a loss for the…

A: Depreciation means the loss in value of assets because of usage of assets , passage of time or…

Q: how can depreciation be a cash flow?

A: Depreciation is an accounting method of allocating the cost of a tangible or physical asset over its…

Q: What is the capitalized cost of the new machinery?

A: Capitalized costs are incurred when an organization purchases any fixed asset such as building,…

Q: Why FASB treat the spending on the search and development as expense why it can’t be treated as long…

A: Accounting Principles: Accounting principles are the regulations and criteria that businesses must…

Q: What is the relationship of the asset turnover to the return on assets?

A:

Q: Which of the following payback methods assumes that the asset acquired may not last its estimated…

A: Capital Budgeting technique: It is the process  by which  value of a potential investment project is…

Q: How is the Salvage value a positive cash flow?

A: Cash flows are the cash generated from the operation of the business organisation. In other words,…

Q: What are the economic benefits of leasing vs ownership of assets?

A: MEANING:- Leasing of Assets - The leasing of assets refers when the owner gives the right to use…

Q: Weigh-in the advantages and disadvantages of leasing over debt financing in acquiring long-term…

A: Long-term assets are assets that will benefit the organisation for more than a year, whether they…

Q: What does Capital Recovery (Ownership) Cost?

A: Capital recovery cost It is an equivalent annual amount each year an asset must earn to recover…

Q: ow do you think today's low interest rate environment is impacting the time value of money? How…

A: Time Value of Money: It refers to the concept which tells the value of money is worth more than in…

Q: the equation for book value is: book value = cost of an asset minus its accumulated depreciation.…

A: Asset: Asset is a resource owned by a company from which future economic benefits are expected to…

Q: Explain the significance of time value of money in financial valuation?

A: Time value of money means the value of a sum of money in future is not the same as the value of…

Q: When a fixed asset is sold for less than book value, which one of the following will decrease?

A: Ratio Analysis: This refers to the performance measurement of the business, in order to know the…

Q: Explain why the value of an asset is its current market value and not what you paid for it? Why is…

A: There are two methods for valuing anything. The first method is the historical cost method.…

Q: What are the potential tax consequences of selling an old asset in an asset replacement investment…

A: Calculation of potential tax consequences of selling an old asset::: In the given case if the sale…

Q: One of the advantages of leasing rather than purchasing an asset is that leasing offers flexibility…

A: Lease: Lease is a contractual agreement whereby the right to use an asset for a particular period of…

Q: What costs are included in determining the total cost of an asset? Why would a company include more…

A: Asset refers to the resources used by the company in order to run operations effectively and…

Q: Why is the fixed asset riskier than current asset?

A: In financial accounting, the company's financial statements assets are classified into two…

Q: Under normal circumstances, will the carrying value of a long-term asset be equal to its market…

A: Assets are recorded at historical figures.

Q: What would the result of Capitalizing the purchase cost over time?

A: Capitalized Cost: A type of expense that is added or included in the cost basis of a non-current…

Q: As a result of the transaction, what is the effect on the profit or loss? what is the cost of the…

A: On the occasion of disposal/exchange/sale of an asset, the net income of the entity is impacted by…

Q: What is the cost of accrued liabilities? If accruals have such a low cost, why don’tfirms use them…

A: An accrued liability refers to an expense a business has incurred during a specific period but has…

Q: Explore the implications of short-selling and the inclusion of a risk-free asse

A: Short selling may be a trading or investment strategy that bets on the worth of a stock or other…