Leasing Flashcards
1
Q
What is leasing
A
This is the paying to use an asset spreading the cost over its useful life
2
Q
What are the advantages of leasing
A
Leasing can offer low offer monthly payments.
There is applied improved cash flow due to monthly payments.
There is no applied long term commitment.
3
Q
What are the disadvantages of leasing
A
After the end of the lease, the product is not actually owned.
Overtime, the lease tends to be more expensive than actually buying the asset.
4
Q
Is leasing a short term or long term source of finance
A
Long term source of finance
5
Q
In what situation is leasing usually used
A
Leasing is usually used when a business does not want to fully commit to an item
