Advantages-disadvantages to leasing for a lessee

Reference no: EM13151100

George Harmon is the president of the Utah Western Railroad Company. The Utah Western is a bridge line that receives traffic from the Union Pacific Railroad and the Burlington Northern railroads at Salt Lake City, Utah, and hauls the freight to Denver, Colorado, for connections with other lines to points east.

Recently, traffic on the Utah Western has increased dramatically and the railroad is in need of additional locomotives to haul its trains. Accordingly, George is considering leasing locomotives to meet the demands of this increase in traffic until new engines can be ordered if the surge subsides. As the controller of the railroad, George has asked you to advise him as to the disadvantages associated with leasing generally.

INSTRUCTIONS:

1) List and explain three advantages to leasing for a lessee.

2) List and explain two disadvantages to leasing for a lessee.

Reference no: EM13151100

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