If borrowing to purchase the asset would subject the firm to debt-related restrictions, then this scenario makes the asset a likely candidate for leasing.

Name: If borrowing to purchase the asset would subject the firm to debt-related restrictions, then this scenario makes the asset a likely candidate for leasing.
Brand: Quizplus
Rating: 4.8 (38 reviews)

Question

Quizplus · Accepted Answer

Leasing can provide a way to access assets without the need to borrow funds directly, thus avoiding debt-related restrictions and covenants that might be imposed by lenders.

If Borrowing to Purchase the Asset Would Subject the Firm