Walid carries on a retail electronics equipment sales business.He needs a new delivery truck.He is considering two options for acquiring the truck: a secured bank financing and lease financing with an option to purchase the truck.Which of the following distinguishes secured bank financing from lease financing?

Question

Quizplus · Accepted Answer

Secured bank financing involves taking out a loan to purchase the truck, while lease financing involves renting the truck with an option to purchase it at the end of the lease term. With lease financing, Walid would not own the truck until he exercises the option to purchase it at the end of the lease term. Therefore, the correct answer is D. Option A and Option B are incorrect as there is no information to suggest that either financing option is more or less expensive or harder to obtain. Option C is incorrect as the options are not the same. Option E is incorrect as the lessor is responsible for ensuring the return of the truck in good condition at the end of the lease term.

Walid Carries on a Retail Electronics Equipment Sales Business