Discuss CIPS L4M7 Exam Topic 7 Question 72

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?

ALong-term commitment to pay installments even if not using the asset

BCosts are known and agreed in advance

CThe usage of the asset is usually capped

DThe total cost of ownership is not applicable as the asset is leased

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.

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25 comments · newest first

Clay 23 days ago

Right, but B still stands out for clarity in expenses.

Zoila 28 days ago

C is also a concern. Capped usage can limit growth.

Pearlene 1 month ago

Exactly! A can tie you down even if you don’t need it.

Chauncey 1 month ago

I feel like A is a downside. Long-term payments can be risky.

Lacresha 1 month ago

True, but D can be misleading. You still pay for usage.

Helaine 2 months ago

But what about D? Leasing means no ownership worries.

Marya 2 months ago

Agreed, B makes budgeting easier. No surprises!

Leslie 2 months ago

I think B is the best choice. Knowing costs upfront is crucial.

Jesusita 2 months ago

B just seems the most straightforward.

Lavina 2 months ago

True, but D avoids hidden costs.

Lynette 2 months ago

I feel like C limits flexibility.

Merissa 3 months ago

But B really helps with planning.

Princess 3 months ago

D is interesting too. No ownership worries.

Corrina 3 months ago

A is a downside. Long-term payments can be risky.

Kandis 3 months ago

Agreed, B makes budgeting easier.

Matilda 3 months ago

I think B is the best choice. Costs are clear.

Novella 4 months ago

D is interesting, but not having ownership can be risky.

Sabra 4 months ago

Wait, can you really just walk away after leasing? Sounds too good to be true.

Shanice 4 months ago

Totally agree with B! No surprises!

Rebbecca 4 months ago

I disagree, A is a downside for sure.

Ulysses 4 months ago

B is definitely a plus! Costs are clear.

Nieves 4 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.

Pansy 6 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.

Allene 6 months ago

I'm not entirely sure, but I remember something about how leasing avoids long-term commitments, so maybe option B is correct?

Hillary 6 months ago

I think leasing can be beneficial because the costs are known and agreed in advance, which helps with budgeting.

CIPS L4M7 Exam - Topic 7 Question 72 Discussion