Why might refinancing be considered an alternative to a sale-leaseback?

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: A call option holder has an obligation to sell the asset. True or false?

A: A call option is an instrument which provides its holder an option to buy an underlying asset on a…

Q: What is non-tax-oriented lease?

A: Non- tax Oriented lease: The lease where the lessor cannot avail tax exemptions for the capital…

Q: Why we will have a residual value in an operating lease?

A: Residual value is an estimated value of the asset at the end of lease term. In operating lease, we…

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: What is a sale-and-leaseback transaction?

A: Sale and leaseback is a deal in which the owner of an asset trades an asset, typically real estate,…

Q: How does a leveraged lease differ from a nonleveraged lease?

A: A leveraged lease is an agreement that is partially financed by the third party creditor. In this…

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: What is the concept of sale-leaseback agreement?

A:

Q: Why should investors be concerned about market rents if they are purchasing a property subject to…

A: Lease is an agreement by which one party agrees to use the property such as land or building of…

Q: What are the advantages of lease?

A: A lease is a contract under the terms under which one party agrees to rent property owned by another…

Q: What is the significance of the passive activity loss limitation (PAL) rules for real estate…

A: Significance of the passive activity loss limitation (PAL) rule for real estate investors: The…

Q: Which of the following has the right to sell an asset at a predetermined price?

A: A put option is an instrument which provides its holder an option to sell an underlying asset on a…

Q: What is a synthetic lease?

A: The synthetic lease is a type of arrangement wherein the Parent company creates a separate entity…

Q: Explain Lease-versus-Own Analysis?

A: Owning is the right of an entitlement to an asset by purchasing it while leasing is the contract by…

Q: What is the difference between an “operating” and a “capital” lease? In easy terms please!

A: The criteria for defining the lease as a capital lease or operating lease   As per the notes issued…

Q: Explain Lease Renewal Options and REIT Rent Growth?

A: Answer: Lease renewal option: A renewal option allows a lease to apply for a definite time period,…

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: Clearly explain why the issue of lease capitalization has been controversial.

A: A lessee is a person or a company that obtains an asset for use, in exchange for lease rent;…

Q: What is the difference between a tax-oriented lease and a nontax-oriented lease?

A: A tax-oriented lease: A tax-oriented lease, occasionally named a true lease, which offer the lessor…

Q: Does a lessee have an option not to separate lease and non lease components?

A: Lease: A lease or a lease agreement is a binding contract between two parties that dictates…

Q: When can a lease create both an asset and a liability for the lessee?

A: Lease is an agreement between two persons in which one grants the right to another to use a…

Q: Why is the reporting of leases required? Justify your response.

A: A lease is an agreement where an asset is taken on rent and Lessor receives Lease rental in return.…

Q: Why is lease reporting required? Justification for your answer.

A: A lease is an arrangement in which an asset is rented out, and the Lessor gets a rental payment in…

Q: Why would anyone want to purchase an F or IF derivative type of investment?

A: Floater tranche(f) It refer to that type of security whose coupon rate copy the movement of index on…

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: Describe what if Lease Terms are modified?

A: Lease Terms are the terms on which both lessor and lessee agrees to enter into a specific lease. It…

Q: What is meant by “loss to lease”? Explain?

A: Loss to lease: It is the term used in Real Estate in leasing of property mainly apartment complexes,…

Q: Explain term Foreclosure?

A: Foreclosure:

Q: Describe about the EFFECT OF A RESIDUAL VALUE ON LEASE CLASSIFICATION?

A: Introduction Residual value is the amount, the asset's owner earns after selling/disposing that…

Q: What are the disadvantages of lease?

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

Q: What are capital lease?

A: The definition of a  lease is that "A  lease is a contract entitling a renter to the temporary use…

Q: Can the present value of minimum lease payments differ between the lessor and lessee? If so, how?

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

Q: What is meant by Non-Cancellable lease?

A: Lease: It is an agreement between two parties in which one party agrees to give an asset on lease…

Q: what will be the Market Leasing Assumptions with Renewal Probabilities?

A: Market leasing assumption is a very important assumption which is used in calculating the value of…

Q: Which are the Factors Affecting Own-versus-Lease Decisions?

A: Owning an asset involves purchase of the asset using own or borrowed sources of funds, whereas…

Q: Why does a finance lease is economically similar to a purchase of the asset?

A: There are many similarities between purchase of a asset and Finance lease, such as: In a finance…

Q: What factors would tend to affect the value of a lease?

A: Lease is a contract between two parties in which one party lends its property or asset to the other…

Q: What discount rate should be used to evaluate a lease? Why?

A: Lease may be defined as the legal contract between two party's lessor and lessee, were one party…

Q: What if Lease Terms are Modified?

A: Lease terms is a contractual agreement or obligation that is prepared and signed by both lessor and…

Q: What factors would tend to make leasing more desirable than owning?

A: Lease: Leases are agreements in which the proprietor of the asset permits another party to utilize…

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: What is meant by a derivative investment

A: Derivative is a contract which allows its parties to buy/sell an underlying asset as per the…

Q: Why do person choose to buy on lease?

A: Lease: Lease refers to a contract that outlines the terms under which one agrees to rent his or her…

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…