The sale and leaseback is advantageous to the lessee because
A)the lessee cannot continue using the asset
B)the lessee receives cash from the sale of the asset
C)the lessee receives title to property at the termination of the lease
D)the lessee is never required to pay taxes and insurance

Question

Quizplus · Accepted Answer

The sale and leaseback arrangement allows the lessee to sell an asset to the lessor and then lease it back from the same lessor. This arrangement provides the lessee with cash from the sale of the asset, which they can use for other business purposes. Therefore, option B is the most advantageous choice. Option A is incorrect because the lessee can continue to use the asset. Option C is incorrect because the lessor retains title to the property even after the termination of the lease. Option D is incorrect because the lessee is generally responsible for taxes and insurance during the lease term.

The Sale and Leaseback Is Advantageous to the Lessee Because