- 20 Marks
MCB-F&I – OCT 2022 – L4 – Q3 – Leasing Concepts and Cash Holding Motives
Define lease, differences between operating and finance leases, advise on choice for KFC's gen set acquisition, and motives for MNCs holding cash
Question
KFC Incorporated is an MNC engaged in operating a food chain in Ghana. The Chief Executive Officer (CEO) hinted recently that the food giant intends acquiring a heavy powered gen set to supplement their energy needs. The Board had advised the Chief Executive Officer to contact their Bankers to arrange a Finance Lease, to enable them acquire the gen set.
Required:
(i) What is a Lease? (2 marks)
(ii) What are the main differences between an Operating Lease (OL) and a Finance Lease (FL)? (16 marks)
(iii) Advise the CEO of your preferred choice and give reasons in respect of your choice. (4 marks)
(iv) What in your opinion are some of the motives for holding cash by MNC? (8 marks)
(Total: 30 marks)
Find Related Questions by Tags, levels, etc.
- Tags: Cash Holding Motives, Lease Definition, MNCs, Operating vs Finance Lease, Recommendation
- Level: Level 4
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