CIMAPRA19-F03-1 Exam - Topic 3 Question 3 Discussion

Actual exam question for CIMA's CIMAPRA19-F03-1 exam

Question #: 3
Topic #: 3

[All CIMAPRA19-F03-1 Questions]

A company plans toacquirenew machinery.

It has two financing options; buy outrightusing a bank loan, ora finance lease.

Which of the following is an advantage of a finance lease compared with a bank loan?

AItis 'off-balance sheet' and will not affect the company's gearing.

BThe interest rate offered might bemore favourable because the lessor has the security of the asset.

CTax depreciation allowances may be passed on to the company by the lessor.

DThe lessor provides maintenance of the asset.

Show Suggested Answer

Suggested Answer: B

by Paz at May 03, 2022, 04:43 PM

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Domitila

4 months ago

Don't forget about potential tax benefits with depreciation!

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Beatriz

4 months ago

The interest rates can be better with a lease, for sure.

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Adrianna

4 months ago

Really? I thought leases still counted as debt.

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Ellsworth

4 months ago

Totally agree, that's a big plus!

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Ressie

5 months ago

A finance lease keeps liabilities off the balance sheet.

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Wilbert

5 months ago

Okay, I'm pretty sure the Dagger-Hashimoto algorithm is used for mining, but I'm not sure how it relates to the EVM's internal hashing. I'll have to think this through carefully.

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Luz

5 months ago

I've got a good feeling about this one. Removing IPS events is likely a data protection measure to ensure the integrity of the data. I'll select that option.

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Corrinne

5 months ago

I think the HX220C is definitely a suitable option for the branch, but I'm not certain about the second choice.

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