Leasing a Car May Make Sense for Some People but There

question 165

Essay

Leasing a car may make sense for some people but there are disadvantages to leasing.What are the disadvantages to leasing a car verses purchasing the car outright?

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Definitions:

Sunk Cost

A past cost that has already been incurred and cannot be recovered, which should not influence future financial or business decisions.

Net Operating Income

The profit generated from a company's ordinary, day-to-day business operations, calculated by subtracting operating expenses from gross profit.

Contribution Approach

A method of income statement presentation where variable costs are deducted from sales to find the contribution margin.

Expected Cost

An estimate of the cost associated with a project or production, taking into account various factors like labor, materials, and overhead.