Which of the Following Is a Disadvantage of Leasing

question 93

Multiple Choice

Which of the following is a disadvantage of leasing?

• A) It requires a considerably high initial cash outlay than building or buying.
• B) It is expensive than building or buying a property that are of the same value.
• C) Lease expenses are not deductible business expenses.
• D) Renovation options are limited in a leased property.

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Definitions:

Debt Ratio

A financial ratio that measures the extent of a company’s leverage, calculated by dividing its total debt by its total assets.

Total Liabilities

The aggregate of all debts and financial obligations owed by an entity to outside parties at a given point in time.

Total Equity

The value remaining in a company after all liabilities have been subtracted from assets, representing the ownership interest in the firm.

Total Assets

The sum of all resources owned by an entity, including cash, investments, equipment, and property, as recorded on the balance sheet.