Question 1. What is the nature of a "sale-leaseback" transaction?
Question 2. A company is considering expanding operations and is in the process of determining the strategy that will be used for the financing. After a great deal of debate, management determines that it may issue bond with the proceeds needed to purchase additional assets or the company could lease the assets on a long-term basis. Without knowing the comparative costs involved what might be the advantages of leasing the assets instead of owning them.
Question 3. Explain the distinction between a direct-financing lease and a sales-type lease for a lessor?