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

Sale and leaseback would allow Baker to sell its equipment to a leasing company and then lease it back for a set period of time, providing a substantial cash inflow while still allowing Baker to continue using the equipment. This would be a useful solution for Baker's temporary cash shortage without committing to a long-term lease or losing ownership of its equipment.

Baker United Owns Several Pieces of Large Equipment Which It