Lease financing enables the lessee to acquire the asset with a ________ investment.

Higher

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Medium

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Lower

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Both a and b

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Solution

The correct option is A Lower
Lease financing in other words is renting of an asset for some specific period. The lessee pays a fixed periodic amount called lease rental to the lessor for the use of the asset. This enables the lessee to acquire the assets with a lower investment.

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Similar questions

Under the lease agreement, the lessee gets the right to

(a) Share profits earned by the lessor

(b) Participate in the management of the organisation

(d) Sell the assets

A decision to acquire a new and modern plant to upgrade an old one is a

(a) financing decision

(b) working capital decision

(d) None of the above

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