Use Figure 15-9 to describe potential differences between leasing a piece of equipment with a capital lease
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In figure 15-9
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Buying Leasing Capital Markets (e.g., commercial banks (e.g., stocks, bonds, or notes) (e.g., stocks, bonds, or notes) S (net proceeds from sale of S (net proceeds from sale of securities) Lease agreement (conveys use value) Lessor (retains salvage value) Buyer Lessee Lease payments S (purchase price of equipment) S (purchase price of equipment) Title I Use value 2 Salvage value Title 1 Use value 2 Salvage value Equipment Dealer
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In the case of the capital lease the lessor borrow...View the full answer
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Related Book For
Financial Management Principles and Applications
ISBN: 978-0134417219
13th edition
Authors: Sheridan Titman, Arthur J. Keown, John H. Martin
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