Which of the following is NOT an advantage of leasing from the lessor's perspective (compared with offering a straight loan)?
A) Leasing has a relatively low default risk.
B) Administration costs may be lower for a lease than for a straight loan.
C) The return to the lessor may be higher than for a straight loan.
D) The lessor may use the funds for other investment opportunities.

Question

Quizplus · Accepted Answer

The correct answer is D because leasing does not inherently provide the lessor with additional funds for other investment opportunities compared to offering a straight loan. The advantages of leasing from the lessor's perspective typically include lower default risk, potentially lower administration costs, and possibly higher returns, but not necessarily freeing up funds for other investments.

Which of the Following Is NOT an Advantage of Leasing