In the Context of Financing Tools Available to New Businesses

question 32

Multiple Choice

In the context of financing tools available to new businesses, identify a major disadvantage to asset leasing.

• A)Any assets that are leased must be paid for upfront, making the proposition of leasing nearly as expensive as purchasing new equipment outright.
• B)A new business might spend more money on leasing equipment over time than if it had bought the equipment outright.
• C)Equipment leasing agreements make it difficult for a small business to upgrade to newer machines when their leased machines become obsolete.
• D)Major asset leasing companies are unwilling to risk leasing equipment to new businesses.

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Definitions:

Convenience

The ease and speed with which a product or service can be purchased or used by a consumer.

Shopping Products

Goods that consumers purchase after comparing quality, price, and style across different sellers, involving more thoughtful decision-making.

Internal Migration

The movement of people within a country, often from rural areas to cities, for reasons such as employment, education, or housing.

Rural Areas

Regions characterized by low population density, limited industrialization, and a predominance of agriculture and natural environment.