The larger an asset's salvage value (i.e., its residual value), the stronger the argument to own instead of leasing.

Question

The larger an asset's salvage value (i.e., its residual value), the stronger the argument to own instead of leasing.​

Quizplus · Accepted Answer

This statement is true because a higher salvage value means that the asset will retain more value over time, making it more valuable to own rather than lease. This is because a leased asset will ultimately be returned to the lessor at the end of the lease term, with no residual value to the lessee. However, if the asset is owned, the owner can sell it at the end of its useful life and recoup some of the initial cost.

The Larger an Asset's Salvage Value (I