Leasing is preferred to buying if:   a. Net Advantage to Leasing is negative    b. Maximum Lease Payment acceptable to Lessee is higher than the Minimum Lease payment acceptable to the Lessor    c. When the NPV of buy and lease for Lessor is positive    d. When Net Advantage to Leasing is positive

Q: True or false explain

A: A lease is a contractual agreement between the lessor and lessee. The owner is paid by the user…

Q: Which one of these statements is correct concerning leasing arrangements? I. The debt financing used…

A: 1) Incorrect: It is the debt of lessor and not the lessee. The lessor will get the title of assets…

Q: One advantage of leasing voiced in the past is that it kept liabilities off the balance sheet, thus…

A: The pros of capital leasing and related assets are as follows: Capitalization of leases might…

Q: Under an operating lease, the lessor recognizes a ____________ when the cumulative rental income is…

A: Under an operating lease, the lessor recognizes a Rent Receivable when the cumulative rental income…

Q: D7 An advantage of a cash lease relative to a crop share lease is: The tenant retains more…

A: Lease is an agreement which allows a user to use an asset against fixed periodic payments.

Q: When are initial direct costs recognized in an operating lease? In a sales-type lease with selling…

A: Initial direct cost paid by the lessee is added to the right-of-use asset. If incurred by the…

Q: In a lease contract, a zone of agreement exists when      NPV of Lease is greater than NPV of Buy…

A: A contract where there are two party’s lessors and lessee, where the lessor agrees to rent the…

Q: If the lessee and lessor use different interest rates to account for a finance/sales-type lease,…

A: Lease is agreement where lessor (asset owner) allows lessee (tenant) to use lessor’s asset for…

Q: Q: Why might a new business be unable to get trade credit ?

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: In a lease contract, a zone of agreement exists when O NPV of Lease is greater than NPV of Buy…

A: The term lease contract refers to the contract between two parties in which one party allows another…

Q: Initial direct costs incurred by the lessor in connection with specific leasing activities as in…

A: Solution: Initial direct costs incurred by the lessor in connection with specific leasing activities…

Q: 4. Initial direct costs incurred by the lessor in connection with specific leasing activities as in…

A: Solution: Initial direct costs incurred by the lessor in connection with specific leasing activities…

Q: Leasing is a popular form of financing because Group of answer choices A. the lessee may not be…

A: Leasing : Leasing is a mechanism for a business to gain the use of its capital assets in exchange…

Q: Which of the following typically represents an advantage of leasing over purchasing an asset with an…

A: When a fixed asset is needed by business, then it can purchase the asset or it can take that asset…

Q: Differentiate between an operating lease, acapital (or financial) lease, and a sale andleaseback…

A: Answer: The term operating lease would be significantly shorter than the rented asset’s life. And in…

Q: Would using a higher discount rate increase or decrease the amount of lease liability recorded?

A: Lease: A contractual agreement for an asset between two parties. The parties involved are lessee and…

Q: The lessee compares the present value of owningthe equipment with the present value of leasingit.…

A: A person who provides the property on lease to another person i.e lessor. The lease is to be…

Q: Leasing Cost Why the aftertax borrowing rate is the appropriate discount rate to use in lease…

A: Lease evaluation is the process where financial lease is evaluated on the basis of its feasibility…

Q: Security deposits, which are refundable to the lessee upon lease termination, are treated as prepaid…

A: Leases is an agreement or contract between two parties under which one party provides it's asset for…

Q: When both the gross investment and cost of the leased asset is equal for both direct and sales-type…

A: A lease is a contractual agreement between two parties wherein the lessor (owner) provides the right…

Q: How may the use of leases shift the risk of rising expenses from the lessor to the lessee?

A: A lease may be defined as a contract outlining the terms under which one party agrees to rent…

Q: What is selling profit on a sales-type lease? How do we account for a sales-type lease with a…

A: Sales-type lease: Sales type lease in equivalent type of direct financing whereby the owner (lessor)…

Q: Leasing Cost Explain why the aftertax borrowing rate is the appropriate discount rate to use in…

A: The borrowing rate is defined as the interest rate that includes many kinds of interest rates. The…

Q: Explain the recognition of profit on a finance lease transaction for lessorswho are manufacturers or…

A: A lease can be defined as a contract or agreement that allows the lessee to pay a certain amount of…

Q: Is leasing a zero sum game in the sense that any gain to the lessee is a cost to the lessor? If…

A: The question is based on the concept of leasing.

Q: TRUE OR FALSE: in a sales type lease the net investment in the lease is credited to the appropriate…

A: Lease is a financial transaction where one party, the lessor leases his asset to another party…

Q: What are the major advantages to a lessor for becoming involved in a leasing arrangement?

A: The Effect of Residual Values, Guaranteed and Unguaranteed is as follows: In setting the lease…

Q: Under a sales-type lease without an operating profit, how is the lessor's cost (1.e., the initial…

A: Solution:- Definition :-  It is a lease, which transfers substantially all the risk and rewards…

Q: A lease that involves a manufacturer’s or dealer’s profit is a(an):(a) direct financing lease.(b)…

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

Q: statements be different in a leasing situation (for both operating leases and finance leases) for…

A: Leasing means an agreement between lessor and lessee in which lessor shall allowed to use the asset…

Q: Under an operating lease, the lessee recognizes a ____________ when the aggregate rental payments is…

A: Under an operating lease, the lessee recognizes a  Rent payable when the aggregate rental payments…

Q: Net investment in a sales-type lease is equal to

A: Net investment in sales type lease is recognized by lessor as amount of lease receivable. Option (a)…

Q: Net investment in a sales-type lease is equal to Gross investment less unearned financing revenue…

A: Sales-type lease is a type of lease where the lessor is assumed to sell the property to lessee.…

Q: What difference is between operating lease and finance leasing?

A: A lease is a financial agreement between two parties, i.e., lessor and lessee. A lessor is a person…

Q: There are two parties in any lease contract—the lessee and the lessor. To a lessor, a lease analysis…

A: The step involved will be: Determining the lease payments minus income taxes and any expenses…

Q: Which of the following is nota reason why some companies lease rather than buy? A. Leasing may…

A: Under the lease contract, there exist two parties one is the lessor (owner of the asset) and the…

Q: Explain the differences in revenue recognition for the lessor in a sales-type lease, a direct…

A: (a) Sale-type lease: Under this, revenue is recognized at the beginning of the lease. If the…

Q: When both the gross investment and cost of the leased asset is equal for both direct and sales-type…

A: A lease is a contractual agreement between two parties wherein the lessor (owner) provides the right…

Leasing

Leasing is a contractual arrangement in which someone (a lessee) pays the owner (or lessor) of a building, land, vehicle, or other asset for the use of that asset. The lease is the agreement between lessee and lessor.