Leasing types

Leasing types- Compare two types of leases, and describe the advantages and disadvantages of each. Which type of lease would produce the lowest risk?

Leasing types-The two types of leases are operating leases and capital leases.

Operating leases:

Advantages:

Lower monthly payments compared to capital leases
No liability on the balance sheet as the leased assets are not considered owned
Flexibility to return the leased assets at the end of the lease term or to upgrade to new equipment
Lower risk as the firm is not responsible for the residual value of the leased asset

Disadvantages:

Leasing types-The two types of leases are operating leases and capital leases.

Operating leases:

Advantages:

Lower monthly payments compared to capital leases
No liability on the balance sheet as the leased assets are not considered owned
Flexibility to return the leased assets at the end of the lease term or to upgrade to new equipment
Lower risk as the firm is not responsible for the residual value of the leased asset

Disadvantages:

Leasing types-The two types of leases are operating leases and capital leases.

Operating leases:

Advantages:

Lower monthly payments compared to capital leases
No liability on the balance sheet as the leased assets are not considered owned
Flexibility to return the leased assets at the end of the lease term or to upgrade to new equipment
Lower risk as the firm is not responsible for the residual value of the leased asset

Disadvantages:

Leasing types-The two types of leases are operating leases and capital leases.

Operating leases:

Advantages:

Lower monthly payments compared to capital leases
No liability on the balance sheet as the leased assets are not considered owned
Flexibility to return the leased assets at the end of the lease term or to upgrade to new equipment
Lower risk as the firm is not responsible for the residual value of the leased asset

Disadvantages:

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