Intermediate Accounting, 10 Ed
10th Edition
ISBN: 9781260310177
Author: Mark W. Nelson, Wayne B. Thomas J. David Spiceland
Publisher: McGraw-Hill Education
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How does Leasing offer flexibility and a lower cost when disposing of the asset?
explain motivations for leasing assets instead of purchasing them;
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.
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- Which one of the following is not an advantage of leasing fixed asset? a. Repairs and maintenance are borne by the lessor b. Risk of loss due to obsolescence is on the lessee c. Lessee has access to asset without the need to purchase the asset d. Lessor becomes the owner of the assetarrow_forwardList four potential benefits to the lessor of leasing versus selling an asset.arrow_forwardHow does Leasing offer protection against the risk of declining asset values?arrow_forward
- What factors would tend to make leasing more desirable than owning?arrow_forwardHow does the Leasing reduce the upfront cash needed to use an asset?arrow_forward Which is not an advantage of leasing from a lessee's viewpoint? A.The asset can be acquired without having to make a substantial down payment. B. Leased assets are never reported on the balance sheet. C. The risk of obsolescence may be reduced. D. A lease may provide 100% financing.arrow_forward
- What are the economic benefits of leasing vs ownership of assets?arrow_forwardWhat are some non financial reasons for leasing?arrow_forwardWhich of the following costs are NOT typically capitalized when acquiring a new piece of equipment? Calibration costs Interest on the loan necessary to acquire the equipment Freight charges to bring the equipment to its intended location Installation costsarrow_forward
- Briefly explain two disadvantages of sale and leaseback transactionsarrow_forwardIf a newly acquired asset is ‘held for sale’, the asset or disposal group will be measured at: A. Cost B. The lower of “Cost” and “Fair value, less costs to sell’ C. The higher of “Cost” and “Fair value, less costs to sell’ D. Fair value, less costs to sellarrow_forwardA company is considering replacing one of its old assets with a new one. The original purchase price of the old asset represents – Group of answer choices Relevant cost Differential cost Sunk cost Opportunity costarrow_forward
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