1)Differentiate between external financing, internal financing, leasing, and equity capital.

2)What factors would tend to make leasing more desirable than owning?

3)What are the differences between a wet lease, an operating lease, and a financial lease?

4)On January 1, 2015, Middle Georgia Airlines (MGA) leased a DASH-8 from a leasing company (4-year lease). The lease agreement specifies four annual payments of $1.5 million beginning January 1, 2015, the inception of the lease, and then on each January 1 through 2018. The useful life of the aircraft is estimated to be seven years. Before deciding to lease, MGA considered purchasing the aircraft for its cash price of $6,200,000. How should this lease be classified?

Answer rating: 100% (QA)

Financing Options and Lease Classification 1 Financing Differentiation External Financing This involves acquiring funds from outside sources like bank... View the full answer