Which of the following statements is true of leasing?
A)It is an arrangement in which a contractor supplies managerial know-how to operate a hotel, hospital, airport, or other facility in exchange for compensation.
B)The lessor transfers ownership of the property in exchange for a lump-sum payment.
C)It is a high-risk and high-cost method of entering a foreign market.
D)A major advantage for the focal firm is the ability to gain quick access to target markets, while putting assets to use in earning profits.

Question

Quizplus · Accepted Answer

Leasing is a method of obtaining the use of assets without owning them. One major advantage of leasing for the focal firm is the ability to quickly enter target markets and put assets to use for earning profits. Option A refers to management contracts, option B refers to outright sale, and option C implies that leasing is a high-risk and high-cost method of entering foreign markets, which is not necessarily true.

Which of the Following Statements Is True of Leasing