Reference no: EM132811388

Problem 1: Bradley Co. is expanding its operations and is in the process of selecting the method of financing this program. After some investigation, the company determines that it may (1) issue bonds and with the proceeds purchase the needed assets or (2) lease the assets on a long-term basis. Without knowing the comparative costs involved. What might be the advantages of leasing the assets instead of owning them?

a) Leasing may be more flexible in that the lease agreement may contain less restrictive provisions than the bond indenture.
b) Leasing permits 100% financing of assets, as the lease is often signed without requiring any money down from the lessee.
c) Leasing may permit more rapid changes in equipment, reduce the risk of obsolescence, and pass the risk in residual value to the lessor or a third party.
d) All of above