CHAPTER 22
Asset-based Financing: Lease, Hire Purchase and Project Financing
LEARNING OBJECTIVES
- Define lease and highlight its true advantages.
- Explain the methods for evaluating a lease.
- Calculate net advantage of lease and equivalent loan of lease.
- Discuss the concept of a leveraged lease.
- Highlight the difference between hire purchase financing, instalment sale and lease financing.
- Evaluate the significance of hire purchase financing.
- Explain project financing as a special mechanism for financing large projects and its various types.
INTRODUCTION
Traditional financing is related to the liability side of the balance sheet. The firm issues long-term debt or equity to meet its financing needs, and in the process, expands its capitalization. ...
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