Some people compare buying a car to renting an apartment: "you pay a monthly fee to use it but don't own it -- and aren't making payments toward ownership. The leased vehicle remains the property of the lessor -- the company that issued the lease" (Peters 2009). However, cars depreciate rather than appreciate in value, unlike real estate. Monthly lease payments are cheaper than payments on a new car, a lease is generally of shorter duration than a car loan. "Another nice thing about car leasing is that you're always driving a new or nearly new vehicle. And of course you don't have to worry about the potentially expensive repair and/or maintenance problems that inevitably crop up as a car ages -- and gets out of warranty" (Peters 2009) the leased car will be under factory warranty for the duration of a standard two-year lease and may even cover routine maintenance, such as oil changes.
But at the end of the lease, the renter is that much the poorer, with no asset in exchange for the 'rent' he or she was paying to the lender. A car owner making car payments still has the equity, and can use or sell the car. "Though it will continue to depreciate with each passing year, so long as it's still serviceable transportation, it will always be worth something. That value can be used as a trade-in; or the vehicle can be sold privately to help raise money to pay for a new one -- or for some other need" (Peters 2009).
In general, there are certain people who should never lease cars -- people who have long commutes, for example, as leases limit the amount of miles a renter may...
Capital Budget for River County In the current dynamic business environment, finance managers are continually faced with decisions on the best type on assets to invest in. County governments, for instance, have to analyze various investment decisions on behalf of the residents, and to estimate costs and benefits that are related to these decisions. According to Peterson and Fabozzi (2002), firms, as well as counties, should continually invest funds in
Capital Leases, n.d.). These two have significant impacts on the balance sheet and income statement of the firm. In the balance sheet, the operating lease has no effect while the capital lease shows interest receivable and capital asset with depreciation on the asset side and debt on the liability. In the income statement, both the operating lease and capital lease records an operating expense; the latter also shows interest as
General Electric Company is one of the most acknowledged companies across the world. The company's center of operations is situated in Boston. In particular, the manufacturing company has various business operations in different segments. These include oil and gas, power and water, aviation and transportation. This shows the company's versatility in manufacturing as it ranges from the engineering industry to automotive industry. The company's prevailing revenue generated lies in the
Leasing and Purchasing are two major options available to most of the organizations when it comes to acquisition of fixed assets especially capital resources. At the same time these decisions are tricky to be made and therefore require that not only quantitative but also qualitative factors are taken into account. Arrowvale Electronics is one of the leading Electronics manufacturer and Electronic solution provider in the United Kingdom. The company is located
The questions of buying or leasing have been the concern of finance managers and experts, favoring a lease over a purchase, Leasing tends to cost the company a bit more, since the effective interest rate is usually higher. On the other hand, it is often easier to enter into a lease than to obtain an equipment loan from a bank (J. Schiff, 2005)" The idea that leasing always costs more isn't true,
leasing assets vs. buying. The question of whether to buy an asset or to lease an asset is quite complex. Indeed, the answer is not always a black and white, straight response. Often, there is a grey area when researching whether to purchase or lease. For instance, if one wishes to purchase a house and live within the residence for two years, the residence can then be rented out and
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