ENTREPRENEURIAL FINANCE
SOURCES OF FUNDING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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In order to attract investors the interest has to be higher-increasing the cost of finance
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Never become the owner of the item-cost of the item becomes expensive if needed long term
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Value of the item is less than when it was first purchased
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None of the above
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Detailed explanation-1: -Loss in the Salvage Value of Asset The lessee cannot realize the salvage value of the asset at expiry of the lease period as he is not the owner of the asset rather the asset is returned to the lessor.
Detailed explanation-2: -Leasing also has disadvantages, including: Potentially higher overall costs, depending on the length of the lease’s term. Continued payment for obsolete equipment – and even equipment you no longer use – if your lease doesn’t include upgrades and your term hasn’t ended.
Detailed explanation-3: -You Don’t Own the Car. The obvious downside to leasing a car is that you don’t own the car at the end of the lease. It Might Not Save You Money. Leasing Can Be More Complicated than Buying. Leased Cars Are Restricted to a Limited Number of Miles. Increased Insurance Premiums.