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Finance & Accounting
Pages 6 (1506 words)
Final exam Name: Instructor: Course: Date: Introduction The decision to lease or buy a car depends on the ability to evaluate the various options and come up with the best possible approach to problem solving. The major challenge for companies is the ability to pay for the car in the short-term, the duration of the contract or engagement and the reasons for the purchase (Daugherty, Chen2, Mattioda, & Grawe, 2009, p.
25). The first year of operation, the expansion of the company may be limited because of the evaluation of the cash flows to ascertain profitability of capital purchases. Leasing on a 36 month plan for 2013 ODYSSEY LX Leasing has several advantages that could lead to it being an advantage for the company. According to Parker, leasing has six main advantages that make it possible for businesses to use it as a method of acquisition of services (Parker, 2005, p. 48). Leasing offers chance of 100 percent financing which means that most leases come with a financing plan that makes it possible. The monthly contribution for the service may be cheaper. In fact, from the values obtained in the lease of the cars, it is evident that leasing offers lower monthly charges compared to purchase charges. The second advantage of leasing is the reduction of situations of obsolescence. Vehicles depreciate fast making them obsolete in a couple of years. Thirdly, leasing offers asset flexibility which makes it easy to obtain assets. Total Initial Fees $15.00. Amount Due at Start of Lease $442.23; Total Monthly Payment $357.73. ...
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