alleryStart learning →What is the usual outcome at the end of a finance lease, as in hire purchase?
ALease renews for ever
BLessee becomes the owner
CAsset is scrapped
DLessor sells to others
Answer & Solution
Correct answer: B. Lessee becomes the owner
The usual outcome is that the lessee becomes the owner, for example by paying the last rental or a bargain price.
Keep practising Sources of Finance
Browse all Sources of Finance questions for CA Inter, or explore more Financial Management topics.
Related questions
Under operating lease treatment, what happens to leverage ratios?Under the IFRS approach, when is a lease a finance lease?How does capitalising a finance lease affect the balance sheet?Who is typically the legal owner of the asset during a finance lease?Historically, how have many IPOs been priced relative to market demand?In a Dutch auction IPO, what do all successful bidders pay?A greenshoe option usually lets underwriters raise the offering by up to what percentage?What is the fee retained by underwriters out of IPO proceeds called?