TYBAF FM III Leasing and Hire Purchase Quiz

What is lease financing?

• A method of purchasing an asset outright

• A way to invest in stocks

• A type of loan for buying real estate

• A financial arrangement for using an asset without ownership

Who retains ownership of the asset in a lease financing arrangement?

• The lessee

• The lessor

• The bank

• The government

What is the primary difference between an operating lease and a finance lease?

• The duration of the lease

• The ownership of the asset

• The type of asset leased

• The payment structure

What does the term 'lessee' refer to?

• The party taking the asset on lease

• The owner of the asset

• The financial institution

• The government agency

What is a key characteristic of a finance lease?

• No maintenance responsibilities

• Transfer of ownership at the end

• Short-term usage

• Lower monthly payments

In hire purchase financing, what happens at the end of the payment term?

• The asset is returned to the seller

• The asset is auctioned

• The buyer becomes the owner of the asset

• The buyer must pay additional fees

What is typically evaluated in the financial evaluation of leasing?

• Market trends

• Cost-benefit analysis

• Employee satisfaction

• Asset depreciation

Which type of lease is usually for a longer duration?

• Operating lease

• Finance lease

• Short-term lease

• Casual lease

Calculate PV Factor for 5th year at discount rate of 16%.

• 0.674

• 0.567

• 0.476

• 0.764

Find out annual lease rental amount if the cost of an asset is Rs. 20,00,000 and it is to be taken on lease for 10 years and the discount rate is 10% using the required formula.

• Rs. 3,25,468

• Rs. 3,52,468

• Rs. 3,46,528

• Rs. 3,64,258