Which of the following is a reason a company would prefer an operating lease over purchasing an asset?
A) The company's ability to borrow increases due to larger assets.
B) The company beneﬁts from the increase in value of the assets.
C) The risk of loss from obsolescence is reduced.
D) The company does not have to depreciate the asset.

Question

Quizplus · Accepted Answer

Operating leases allow companies to avoid the risk of obsolescence, as they do not own the asset and can return it at the end of the lease term.

Which of the Following Is a Reason a Company Would