All of the following are benefits of leasing except:Problem 5a.They have the ability to shift the tax benefits from depreciation and other deductions froma lessee that has little or no taxable income to a lessor that has substantial taxable income.They provide flexibility to change capacity as needed without having to purchase or sellassets.b.c.d.They have the ability to reduce the risk of technological obsolescence, relative to outrightownership, by maintaining the flexibility to shift to technologically more advanced assets.In an operating lease, the lessee recognizes the signing of the lease as the simultaneousacquisition of a long-term asset and the incurring of a long-term liability for leasepayments.

An agreement of contract that is prepared to transfer the right to use the resources for a…

Answered: All of the following are benefits of…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 4QTD

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Leasing can be beneficial due to: A Tax advantages for both lessors and lessees. B D Guaranteed asset ownership at the end of the lease term. Lower upfront costs compared to purchasing the asset. Reduced maintenance and repair responsibilities for the lessee.
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
Why might leasing be advantageous for both the lessor and the lessee? Group of answer choices If the lessor's tax rates are higher, the lessor can share some of its tax benefits with the lessee in the form of higher lease payments. The lessor can share some of the benefits related to lower transaction costs with the lessee in the form of lower lease payments. More than one of the other statements is correct. If the cost of capital is lower for the lessee, then the lessee can share some of the lower cost of capital with the lessor in the form of higher lease payments. None of the other statements is correct.
Ch19-1: Is leasing a zero sum game in the sense that any gain to the lessee is a cost to the lessor? If not, how might both parties gain from a lease transaction? In your answer, explain how lessee and the lessor analyze the situation, why they might use different inputs in their analysis, and how those inputs differences could affect the outcome
6- Which one of the following is not an advantage of leasing fixed asset? a. Lessee has access to asset without the need to purchase the asset b. Lessor becomes the owner of the asset c. Repairs and maintenance are borne by the lessor d. Risk of loss due to obsolescence is on the lessee
List four potential benefits to the lessor of leasing versus selling an asset.
one of the following is not a primary disadvantage of leasing from the lessee perspective is the: Select one: a. None of the options b. loss of ownership c. risk obsolesces O d. overcast of assets
From the following identify the cost that is not a cost of PPE? Professional fees Nonrefundable taxes Testing the functionality of asset Value added tax Jumn to
Reasons a company may choose to lease an asset include all of the following, except for short-term need for the asset.O high risk of obsolescence.O lack of cash.O preferential tax treatment of leased assets.
Which of the following is nota reason why some companies lease rather than buy? A. Leasing may allow you to borrow with little or no down payment. B. Leasing can improve the balance sheet by reducing long-term debt. C. Leasing can lower income taxes. D. Leasing transfers the title to the lessee at the beginning of the lease.
Which of the following statements is true? Group of answer choices The right-of-use asset is increased by prepaid lease payments and the lessee's initial direct costs, but reduced by lease incentives. The right-of-use asset is increased by prepaid lease payments, but reduced by lease incentives and the lessee's initial direct costs. The right-of-use asset is reduced by the lessee's initial direct costs, but increased by lease incentives and prepaid lease payments. The right-of-use asset is reduced by prepaid lease payments and the lessee's initial direct costs, but increased by lease incentives.
From the following identify the cost that is not a cost of PPE? Professional fees Nonrefundable taxes Testing the functionality of asset Value added tax Iump to

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