State four potential benefits to the lessee of leasing versus purchasing an asset.

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Answer 1

Question

Chapter 20, Problem 1GI

To determine

State four potential benefits to the lessee of leasing versus purchasing an asset.

Expert Solution & Answer

Explanation of Solution

Lease: Lease is a contractual agreement whereby the right to use an asset for a particular period of time is provided by the owner of the asset to the user of the asset. The owner, who possesses the asset, is termed as ‘Lessor’ and user, to whom the right is transferred to, is termed as ‘Lessee’.

State four potential benefits to the lessee of leasing versus purchasing an asset:

The four potential benefits of the lessee include the following benefits:

1. Strategic benefits: Leasing the assets will be cheaper as compared with the purchase of assets.

2. Risk benefits: Leasing the asset will reduce the risk of obsolescence of an asset for the lessee.

3. Financing benefits: In some cases, for leasing the asset, the lessee will get 100% finance. Thus, the lessee will acquire the asset by making a lower down payment. Sometimes for leasing, the interest rate will be lower than the loan interest rates.

4. Tax benefits: The lessee can deduct the lease payments and can write off full cost of the asset. It will results in lower taxable income.

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Students have asked these similar questions

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 asset

Explain the major merits or benefits that accrue to the lessee by acquiring a tangible asset under a leasing agreement

Discuss the residual value of the leased asset. How does it impact the PV of rental payments computation of the Lessee and the computation of the rental payment by Lessor?

Answer 2

Question

Chapter 20, Problem 1GI

To determine

State four potential benefits to the lessee of leasing versus purchasing an asset.

Expert Solution & Answer

Explanation of Solution

Lease: Lease is a contractual agreement whereby the right to use an asset for a particular period of time is provided by the owner of the asset to the user of the asset. The owner, who possesses the asset, is termed as ‘Lessor’ and user, to whom the right is transferred to, is termed as ‘Lessee’.

State four potential benefits to the lessee of leasing versus purchasing an asset:

The four potential benefits of the lessee include the following benefits:

1. Strategic benefits: Leasing the assets will be cheaper as compared with the purchase of assets.

2. Risk benefits: Leasing the asset will reduce the risk of obsolescence of an asset for the lessee.

3. Financing benefits: In some cases, for leasing the asset, the lessee will get 100% finance. Thus, the lessee will acquire the asset by making a lower down payment. Sometimes for leasing, the interest rate will be lower than the loan interest rates.

4. Tax benefits: The lessee can deduct the lease payments and can write off full cost of the asset. It will results in lower taxable income.

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Answer 3

Question

Chapter 20, Problem 1GI

To determine

State four potential benefits to the lessee of leasing versus purchasing an asset.

Expert Solution & Answer

Explanation of Solution

Lease: Lease is a contractual agreement whereby the right to use an asset for a particular period of time is provided by the owner of the asset to the user of the asset. The owner, who possesses the asset, is termed as ‘Lessor’ and user, to whom the right is transferred to, is termed as ‘Lessee’.

State four potential benefits to the lessee of leasing versus purchasing an asset:

The four potential benefits of the lessee include the following benefits:

1. Strategic benefits: Leasing the assets will be cheaper as compared with the purchase of assets.

2. Risk benefits: Leasing the asset will reduce the risk of obsolescence of an asset for the lessee.

3. Financing benefits: In some cases, for leasing the asset, the lessee will get 100% finance. Thus, the lessee will acquire the asset by making a lower down payment. Sometimes for leasing, the interest rate will be lower than the loan interest rates.

4. Tax benefits: The lessee can deduct the lease payments and can write off full cost of the asset. It will results in lower taxable income.

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Answer 4

Question

Chapter 20, Problem 1GI

To determine

State four potential benefits to the lessee of leasing versus purchasing an asset.

Expert Solution & Answer

Explanation of Solution

Lease: Lease is a contractual agreement whereby the right to use an asset for a particular period of time is provided by the owner of the asset to the user of the asset. The owner, who possesses the asset, is termed as ‘Lessor’ and user, to whom the right is transferred to, is termed as ‘Lessee’.

State four potential benefits to the lessee of leasing versus purchasing an asset:

The four potential benefits of the lessee include the following benefits:

1. Strategic benefits: Leasing the assets will be cheaper as compared with the purchase of assets.

2. Risk benefits: Leasing the asset will reduce the risk of obsolescence of an asset for the lessee.

3. Financing benefits: In some cases, for leasing the asset, the lessee will get 100% finance. Thus, the lessee will acquire the asset by making a lower down payment. Sometimes for leasing, the interest rate will be lower than the loan interest rates.

4. Tax benefits: The lessee can deduct the lease payments and can write off full cost of the asset. It will results in lower taxable income.

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Answer 5

Chapter 20, Problem 1GI

To determine

State four potential benefits to the lessee of leasing versus purchasing an asset.

Expert Solution & Answer

Explanation of Solution

Lease: Lease is a contractual agreement whereby the right to use an asset for a particular period of time is provided by the owner of the asset to the user of the asset. The owner, who possesses the asset, is termed as ‘Lessor’ and user, to whom the right is transferred to, is termed as ‘Lessee’.

State four potential benefits to the lessee of leasing versus purchasing an asset:

The four potential benefits of the lessee include the following benefits:

1. Strategic benefits: Leasing the assets will be cheaper as compared with the purchase of assets.

2. Risk benefits: Leasing the asset will reduce the risk of obsolescence of an asset for the lessee.

3. Financing benefits: In some cases, for leasing the asset, the lessee will get 100% finance. Thus, the lessee will acquire the asset by making a lower down payment. Sometimes for leasing, the interest rate will be lower than the loan interest rates.

4. Tax benefits: The lessee can deduct the lease payments and can write off full cost of the asset. It will results in lower taxable income.

Answer 6

Chapter 20, Problem 1GI

To determine

State four potential benefits to the lessee of leasing versus purchasing an asset.

Expert Solution & Answer

Explanation of Solution

Lease: Lease is a contractual agreement whereby the right to use an asset for a particular period of time is provided by the owner of the asset to the user of the asset. The owner, who possesses the asset, is termed as ‘Lessor’ and user, to whom the right is transferred to, is termed as ‘Lessee’.

State four potential benefits to the lessee of leasing versus purchasing an asset:

The four potential benefits of the lessee include the following benefits:

1. Strategic benefits: Leasing the assets will be cheaper as compared with the purchase of assets.

2. Risk benefits: Leasing the asset will reduce the risk of obsolescence of an asset for the lessee.

3. Financing benefits: In some cases, for leasing the asset, the lessee will get 100% finance. Thus, the lessee will acquire the asset by making a lower down payment. Sometimes for leasing, the interest rate will be lower than the loan interest rates.

4. Tax benefits: The lessee can deduct the lease payments and can write off full cost of the asset. It will results in lower taxable income.

Answer 7

Chapter 20, Problem 1GI

To determine

State four potential benefits to the lessee of leasing versus purchasing an asset.

Answer 8

Expert Solution & Answer

Explanation of Solution

Lease: Lease is a contractual agreement whereby the right to use an asset for a particular period of time is provided by the owner of the asset to the user of the asset. The owner, who possesses the asset, is termed as ‘Lessor’ and user, to whom the right is transferred to, is termed as ‘Lessee’.

State four potential benefits to the lessee of leasing versus purchasing an asset:

The four potential benefits of the lessee include the following benefits:

1. Strategic benefits: Leasing the assets will be cheaper as compared with the purchase of assets.

2. Risk benefits: Leasing the asset will reduce the risk of obsolescence of an asset for the lessee.

3. Financing benefits: In some cases, for leasing the asset, the lessee will get 100% finance. Thus, the lessee will acquire the asset by making a lower down payment. Sometimes for leasing, the interest rate will be lower than the loan interest rates.

4. Tax benefits: The lessee can deduct the lease payments and can write off full cost of the asset. It will results in lower taxable income.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

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State four potential benefits to the lessee of leasing versus purchasing an asset.

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State four potential benefits to the lessee of leasing versus purchasing an asset.

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