Why do you think leasing is as popular as it is in practice?

Expert Solution

Leasing is as popular at it is in practice because-

A. Lease payment are lower than the loan payment so it is preferred by large number of individual & entities.

B. Leasing will be leading to better usage of capital by having quality assets to use.

C. there are no risk associated with obsolescence to asset so it will be providing them with cost savings.

D. there is a low capital expenditure involved with the process of leasing and it would be advantageous for the individual and entities.

E. termination rights are attached with the leasing so it has also got a high amount of flexibility and it is popular.

F. it has tax benefits associated with it so it is also leading to high popularity because it will be meaning an individual can plan in advance properly.

G. It is a type of off balance sheet debt so it will be providing an additional advantages to various organisation because it will not be showing upon their books of accounts.

Hence these are the reasons because of which leasing is Highly popular

jeff jeffy answered 2 years ago

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