Which one of the following statements is correct?
A) The lessor is primarily concerned with returning the asset at the end of the lease term without incurring any additional charges.
B) The lessor is primarily concerned about the use of the asset.
C) If a computer manufacturer leased computers it built to others, it would be engaging in leveraged leasing.
D) A firm should always purchase, rather than lease, any asset that has a projected positive salvage value at the end of the relevant period of use.
E) Lessors provide a source of financing for lessees.

Question

Quizplus · Accepted Answer

Lessors provide a source of financing for lessees. They provide funding for the asset, which allows the lessee to use it for a specified period of time. This can be beneficial for the lessee, as they may not have the funds to purchase the asset outright or may not want to tie up their capital in one particular asset. Additionally, leasing can provide tax advantages for the lessee. The lessor, in turn, earns income from the lease payments and may also be able to take advantage of certain tax benefits.

Which One of the Following Statements Is Correct