Which of the Following Are Advantages of Leasing

question 164

Multiple Choice

Which of the following are advantages of leasing?

• A) a lease obligation may be substantially less restrictive than the provisions of a bond indenture.
• B) there may be no down payment as in a purchase.
• C) the negative effects of obsolescence may be eliminated.
• D) all of the other answers are correct

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Definitions:

Cash Flows

The total amount of money being transferred into and out of a business, particularly concerning its operating, investing, and financing activities.

Interest Rate

The amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets.

Capital Budget

An estimate of the major capital and investment expenditures over a period, and the means of financing them.

Cost of Capital

The cost of a company's funds (both debt and equity), representing the rate of return that the company must earn on its investment projects to maintain its market value.