Baker United owns several pieces of large equipment which it uses daily in its operations. Currently, Baker is facing a temporary cash shortage and needs a substantial cash inflow. Once Baker survives this temporary situation, it will return to solid financial ground. Which type of lease might prove useful to Baker in this situation?

Question

Quizplus · Accepted Answer

A sale and leaseback arrangement would allow Baker United to sell its equipment to another party for cash and then lease it back for a specified period. This provides the needed cash inflow while still retaining the use of the equipment for its operations.

Baker United Owns Several Pieces of Large Equipment Which It