How does the company can benefit indirectly by leasing assets rather than buying?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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How does the company can benefit indirectly by leasing assets rather than buying?
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Company can take benefit of leasing assets rather than buying assets due to many reasons:
- Leasing allows a business to acquire assets with minimal initial expenditures.
- Because leases rarely require a down payment, we can obtain the goods without affecting our cash flows.
- Lease also allows company to deduct payments as operating expenseexpenses during the period which we can not claim under purchase of asset.
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