A lease whereby the lessee has the option to purchase the asset at termination of the lease. There are various options to purchase the asset, one is based on fair market value, another is an agreed purchase price at the lease onset, and the third option is a simple purchase price option of $1 or $10. Another term for this type of lease is ‘Capital Lease’.
Fixed assets are normal in business operations. However, financing those assets is the critical issue. If you buy the asset outright, you tie up capital that can be used to expand operations or keep overall […]