A company CFO had mentioned that, given the industry we belong to, owning the asset is...

 

Transcribed Image Text:

A company CFO had mentioned that, given the industry we belong to, owning the asset is a better method than leasing, owning gives us accelerated depreciation and hence better tax savings, because, based on the type of asset we are using, other than depreciation benefits we are not finding any differentiation between ownership and lease. Comment on the validity of the statement. (10 Marks) A company CFO had mentioned that, given the industry we belong to, owning the asset is a better method than leasing, owning gives us accelerated depreciation and hence better tax savings, because, based on the type of asset we are using, other than depreciation benefits we are not finding any differentiation between ownership and lease. Comment on the validity of the statement. (10 Marks)

Answer rating: 100% (QA)

The CFOs statement highlights the advantages of owning assets particularly in terms of accelerated depreciation and potential tax savings However the validity of this statement depends on various fact... View the full answer