After reading this article you will learn about the Advantages and Disadvantages of Leasing for the Lessee. Advantages of Leasing to the Lessee: (i) Avoidance of Initial Cash Outlay: Leasing enables a firm to acquire the use of an asset without making capital investment in buying the asset. The lessee may avail 100% finance from lease financing and avoid even [...]
This article throws light upon the top two ways for financial evaluation of leasing. The ways are: 1. Lessee's Point of View 2. Lessor's Point of View. Financial Evaluation of Leasing: Way # 1. Lessee's Point of View: (Lease or Buy/Lease or Borrow Decisions): Once a firm has evaluated the economic viability of an asset as an investment and accepted/selected [...]
This article throws light upon the six main steps involved in computing lease rentals. 1. Determine the cost of the asset which includes the actual purchase price and expenses like freight, insurance, taxes and installation, etc. 2. Determine the cash flows to the lessor on account of ownership of the asset. These include tax advantage provided by depreciation and investment [...]