Describe some economic factors that might provide an advantage to leasing.

Describe some economic factors that might provide an advantage to leasing.

Category:
June 7, 2021
5 Views
0
0

Describe some economic factors that might provide an advantage to leasing.

Answer and ExplanationSolution by a verified expert

Verified Answer

The following economic factors are proved advantageous forΒ  a lease transaction:

Dynamic environment: The market conditions are highly dynamic that is, changing rapidly. So, it will be beneficial to acquire an asset on lease rather than purchasing it. Therefore, the changing phase of market, demands and the taste of consumers and also the high competition with the other players in the market, makes leasing the asset an advantageous option.
Technological obsolescence: The economy is subject to the rapid technological changes and hence, the existing assets get obsolete more quickly as the new technology is introduced in the market. Therefore, acquiring an asset on lease is more profitable in the scenario of rapid technological advancements, rather than purchasing it.
Uncertainty: There are times when a firm might be uncertain about the demands of its products in the market. If the demand of the company's products falls or extinguishes, the investment made in buying the assets will go to waste which will eventually decrease the value of the firm. Therefore, leasing the assets becomes more beneficial to such companies as the assets can be returned and the lease agreement can be terminated whenever required.

Purchase this answer to view it.
Click the button to login/signup and buy full solution at 2 USD only.

The Best Research Paper Writing Service

Would you want to pay someone to write your paper professionally from scratch? 100% Original and 0% AI Content!.

πŸŽ“ Write my Essay
πŸ“š Write my Persuasive Essay
πŸ“‹ Humanize AI Content for Turnitin
πŸ’» Write my Reflective Essay
πŸ“‘ Write my Research Paper
πŸ“œ Write my Thesis Paper
πŸ“˜ Write my Dissertation
πŸ“‹ Write my Case Study
πŸ“ Write my Online Exam
βœ’οΈ Write my Term Paper
Write my Paper