In considering the advantages of leasing, which of the following statements is correct?
A) Leasing provides approximately 50% of the necessary financing.
B) Leasing can decrease the firm's liquidity.
C) Leasing provides approximately 50% of the necessary financing and can decrease the firm's liquidity.
D) Leasing is not capable of providing at least 50% of the necessary funding nor can it decrease the firm's liquidity.

Question

Quizplus · Accepted Answer

Leasing can often provide 100% of the necessary financing for an asset, enhancing a firm's liquidity by not requiring a large initial outlay of capital. Thus, statements A and B are incorrect, making D the correct choice as it negates these inaccuracies.

In Considering the Advantages of Leasing, Which of the Following