CPPB(2024 Latest Update)Accurate 100%(RATED A+)

Advantages of Leasing - ANSWER L- lessor carries burden of the investment so lessee can use working capital for other opportunities. E - entire expense of lease can sometimes be treated as an operating expense minimizing taxable income A - available equipment on short term basis for projects that don't justify a large outlay of funds. S -so the risk of obsolescence can be minimized or eliminated Disadvantages of Leasing - ANSWER Cost Lessees do not own the assets. Lessors make their profit on the difference of the cost of the asset and the rental rate. approx 120% to 135% of purchase price. Lessor retains control of equipment. (restricts the manner the equipment is operating and the operating supplies that can be used) Special Terms and Conditions - ANSWER S- supplier responsible for post sale service P- performance standards E- establish remedies for failure to perform C- collect performance bond I - incentives and liquidated damages A- accpetance test and inspection methods L- learn guarantee or warranty requirements T- to have plant visits or site inspections C-capital equipment should specify the responsibility of both parties for equipment performance, delivery and post sale activities including the following: Federal Govt. Specification System - ANSWER S- standardization is the process of establishing agreement on the characteristics, quality, design and performance of products to be purchased. O - organziations that set standards C - committee for standards I - information needs to be in certain format T - text should be clear and free of vague terms Format for Fed Govern Specs - ANSWER Scope Applicable publications and terminology Requirements Testing Preparation for delivery Notes Tex