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

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

Question #: 3
Topic #: 3

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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