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CIPS L4M7 Exam - Topic 7 Question 72 Discussion

An organization might find it more beneficial to lease and use an asset over a predetermined period. After this period, the lessee has the right to secure outright ownership of the asset by paying an agreed amount; otherwise, the asset would be repossessed by the lessor. Which of the following is an advantage of leasing?
B) Costs are known and agreed in advance
A) Long-term commitment to pay installments even if not using the asset
C) The usage of the asset is usually capped
D) The total cost of ownership is not applicable as the asset is leased

CIPS L4M7 Exam - Topic 7 Question 72 Discussion

Actual exam question for CIPS's L4M7 exam
Question #: 72
Topic #: 7
[All L4M7 Questions]

An organization might find it more beneficial to lease and use an asset over a predetermined period. After this period, the lessee has the right to secure outright ownership of the asset by paying an agreed amount; otherwise, the asset would be repossessed by the lessor. Which of the following is an advantage of leasing?

Show Suggested Answer Hide Answer
Suggested Answer: B

Leasing allows an organization to predict costs accurately, as installment payments are pre-agreed. This makes financial planning simpler, which is especially beneficial in whole-life asset management where minimizing upfront capital expenditure is often a priority. Leasing also reduces the risk associated with asset obsolescence.


by Nickole at May 05, 2026, 10:09 AM

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Jesusita
4 days ago
B just seems the most straightforward.
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Lavina
9 days ago
True, but D avoids hidden costs.
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Lynette
14 days ago
I feel like C limits flexibility.
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Merissa
19 days ago
But B really helps with planning.
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Princess
25 days ago
D is interesting too. No ownership worries.
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Corrina
30 days ago
A is a downside. Long-term payments can be risky.
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Kandis
1 month ago
Agreed, B makes budgeting easier.
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Matilda
1 month ago
I think B is the best choice. Costs are clear.
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Novella
2 months ago
D is interesting, but not having ownership can be risky.
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Sabra
2 months ago
Wait, can you really just walk away after leasing? Sounds too good to be true.
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Shanice
2 months ago
Totally agree with B! No surprises!
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Rebbecca
2 months ago
I disagree, A is a downside for sure.
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Ulysses
2 months ago
B is definitely a plus! Costs are clear.
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Nieves
2 months ago
I recall that leasing can sometimes limit usage, but I don't think that's an advantage, so I’m leaning towards option B as the best choice.
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Pansy
4 months ago
I feel like I came across a similar question where the focus was on the flexibility of leasing, which might relate to option D.
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Allene
4 months ago
I'm not entirely sure, but I remember something about how leasing avoids long-term commitments, so maybe option B is correct?
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Hillary
4 months ago
I think leasing can be beneficial because the costs are known and agreed in advance, which helps with budgeting.
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