Does leasing release the firm from bad investment? Explain.



Does leasing release the firm from bad investment? Explain...

Answer / Mohd Shameem

Leasing does not automatically release a firm from a bad investment. While leasing can provide some financial flexibility, it does not protect the company from poor decisions related to the asset being leased. If the asset turns out to be less profitable or effective than anticipated, the company will still incur lease payments and may struggle to generate sufficient cash flow to cover those payments.

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