In considering the advantages of leasing, which of the statements is/are correct?
A)Leasing provides approximately 50% of the necessary financing.
B)Leasing can decrease the firm's liquidity.
C)Both a and b are correct.
D)Neither a nor b is correct.

Question

Quizplus · Accepted Answer

Option A is incorrect as leasing can provide up to 100% of the necessary financing. Option B is incorrect as leasing can actually improve a firm's liquidity by freeing up cash flows that would have been used for purchasing assets outright. Therefore, neither option A nor B is correct.

In Considering the Advantages of Leasing, Which of the Statements