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6. Reasons for leasing A successful lease agreement is created so that both the lessee and lessor reap some benefits. Tax and depreciation write-offs are
6. Reasons for leasing A successful lease agreement is created so that both the lessee and lessor reap some benefits. Tax and depreciation write-offs are some critical reasons for leasing, but there are several other qualitative reasons for leasing. Below are two situations in which a firm must decide whether to lease or to buy a particular asset. Based on your understanding of the advantages to leasing from a qualitative perspective, what is the firm likely to do in each situation lease or buy? Assume all other quantitative factors remain constant. Company #1: Win Jet Corp. is a private-jet charter company. Due to increased demand during the summer, it needs to add three more jets to its fleet. Win Jet is more likely to lease Company #2: Kiran owns a medium-sized printing business. She owns three one-color (black) printers and needs a color printer for volume print production. She wants to keep the operating expenses related to the color printer low, so she should a color printer. buy lease
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