Firm X sold its office building and used the proceeds to improve its financial position. The firm then leased the building back in order to continue to use the facility. This is an example of a(n)

Question

Quizplus · Accepted Answer

The situation described is a classic example of a sale and lease-back transaction, where a company sells an asset (such as a building) and then leases it back from the buyer. This helps the company to free up cash from the sale, while still being able to use the asset as though it had not been sold. It is commonly used as a financing strategy, and can also offer tax advantages.

Firm X Sold Its Office Building and Used the Proceeds