Which of the following typically represents an advantage of leasing over purchasing an asset with an installment note? a. Lease payments often are lower than installment payments.b. Leasing generally requires less cash upfront.c. Leasing typically offers greater flexibility and lower costs in disposing of an asset.d. All of the above are advantages of leasing.

Q: In a sale-leaseback transaction the owner of an asset sells it and immediately leases it back from…

A: Sale-Leaseback approach: In the sale-leaseback approach, the owner of the leased asset sells it and…

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: which of the following conditions indicates that a loan assumption is least advisable? An existing…

A: Loan Assumption In a simple term loan assumption which indicates that financial obligation which was…

Q: What is the treatment of unguaranteed residual value under a dealer’s or manufacturer’s lease? a.…

A: SOLUTION-   EXPLANATION-  SUCH AMOUNT IS DEDUCTED FROM THE COST OF LEASED ASSET THIS AMOUNT IS NOT…

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 true of an unsecured loan? A. They are exclusively for cars, houses, and…

A: Loan can be defined as money that somebody lends other person in exchange of some interest that is…

Q: Why is the cost of financing with a sale-leaseback essentially the same as the return from…

A: Introduction: Financing costs are nothing but the interest and other costs that the company incurred…

Q: Determine the indifference price for a property that had an assumable below-market-rate loan?

A: Indifference price is the price at which the investor is indifferent to investing in any of the two…

Q: explain motivations for leasing assets instead of purchasing them;

A: Introduction: Leasing is a mechanism by which the company may receive some capital assets for use,…

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: Leasing is preferred to buying if:   a. Net Advantage to Leasing is negative    b. Maximum Lease…

A: Corporate finance is referred as the decision of the firm to take capital investments and other…

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: One alleged advantage of leasing voiced in the past was that it kept liabilities off the…

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

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: Which is not an advantage of leasing from a lessee's viewpoint? A.The asset can be acquired without…

A: The answer is as fallows

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: What factors must be considered when deciding whether to refinance a loan after interest rates have…

A: Individuals always consider refinancing the loan when interest rate falls because they think they…

Q: What are the pre-requisites of having a successful finance leasing?

A: Finance  leasing is the process wherein the finance company owns the asset legally throughout the…

Q: Assuming that FASB Statement 13 and ASU2016-02 are working as they are supposed to work,should…

A: The Financial Accounting Standard Board (FASB) introduced a new accounting standard ( ASU…

Q: Which of the following are reasons why a company is involved in leasing to other companies? I.…

A: Solution: Following are the reason due to which company is involved in leasing to other companies:…

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: 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: A mine operating company approaches an Islamic financial firm to obtain lease financing for some…

A: Given, Details about a mine leasing financial firm is about to lease some large and special…

Q: Which of the following cash flows is classified as an investing cash flow? A. interest portion of…

A: Cash flow statement means the statement which shows the cash flow in or out of business enterprises…

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: 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: Collateral is a valuable asset that is pledged to ensure loan payments. If you fail to repay the…

A: In mortgage loans, collateral is an asset or security used to take loan.

Q: What is meant by the term “off-balance sheet financing”? When do leases provide such financing and…

A: Financing in the normal course means the company has taken a loan from the investor when there is a…

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: How do you think expense stops and CPI adjustments in leases affect the riskiness of the lease from…

A: INTRODUCTIONLease is a contract in which the right to use the asset is given by the lessor to the…

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: 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 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: 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: cost of capital for a financial lease is the interest rat pay on a bank loan. equivalent loan's…

A: (I) Financing leasing is now not provide the off balance sheet items What companies used to earlier…

Q: Compare the benefits and drawbacks to long-term vs. short-term leases from EITHER the point of view…

A: Lease refers to the contract between the parties in which one party agrees for renting an asset…

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: 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…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.