Preview

Fin/370 Caledonia Products

Satisfactory Essays
Open Document
Open Document
280 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Fin/370 Caledonia Products
There are a lot of factors that Caledonia must consider when they are thinking about buying versus leasing a property. Leasing brings many positive savings in a company; there are many incidentals that may come up while owning a property, such as the unexpected repairs. Leasing can help with long term savings for a company; it provides the comfort of trying new areas out. If Caledonia starts to branch out, opens up new locations in different states, leasing the building will be a lot smarter of an idea than it would be to buy. Not knowing how well the company will do in that state, will provide tons of savings if things do not go as planned. Along with saving during the long term, Caledonia will be saving in overall taxes.
However, if Caledonia has owned a previous leasing site and business is moving. It will be smart for them to go ahead and buy some property. They will be able to save in the long run with owning instead of leasing, because this location will be considered a long term. While owning the site, doing renovations to the building will never be an issue. You will not have to go through the hassle of a third party to the store/ property up to standards to the market. There is already a process with getting permits pulled and getting construction sites up to code.
Depending on the overall move that Caledonia wants to go in will have to be based off of their initial plan on getting more property. As mentioned there are many different pro’s and con’s on why either leasing or buying can be considered an

You May Also Find These Documents Helpful

  • Satisfactory Essays

    1) The benefits for leasing are to reduce risk of owning assets and get a favorable tax benefits. When company is borrowing funds, it increases the debt to equity ratio therefore increase the business risk. On…

    • 402 Words
    • 2 Pages
    Satisfactory Essays
  • Better Essays

    Acc553 Mini Case

    • 870 Words
    • 4 Pages

    1(d) Is it more beneficial to continue leasing the business space or to buy the building? Normally owning the…

    • 870 Words
    • 4 Pages
    Better Essays
  • Good Essays

    1) When it comes to investing in property, it is generally a huge decision to be made by Australian households. What are the important factors that a person needs to consider before going ahead with such purchase?…

    • 2940 Words
    • 12 Pages
    Good Essays
  • Satisfactory Essays

    Fin 370

    • 4083 Words
    • 17 Pages

    2. An 8 percent semiannual coupon bond is priced at $1,204.60. The bond has a $1,000 face value and a yield to maturity of 4.88 percent. How many years will it be until this bond matures?…

    • 4083 Words
    • 17 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Fin 370

    • 388 Words
    • 2 Pages

    Resource: Chapter 20, Mayo, H. B. (2012). Basic finance: An introduction to financial institutions, investments, and management (9th ed.). Mason, OH: Thomson.…

    • 388 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Oakwick Case Study

    • 317 Words
    • 2 Pages

    An assessment of population demographics and a progressive study would illustrate the inflationary impact this expenditure may have on the fiscal health of the town. The Township needs to ensure they have funds available to pay their everyday bills, and take into consideration the decline in revenue that will occur shortly. To fund this property Oakwick may end up causing an increase in property taxes which would further compound the anticipating exodus. Another viable option may be to partner with the state conservation and natural resource division in preserving the land or with the county. There are a plethora of open land grants that may assist Oakwick in maintaining the property. If the state has funding such as the Green Acres fund in New Jersey, the acquisition of the land would be wholly supported through this project. There are nonprofit land trust organizations that preserve open spaces. A grant proposal would need to be written, but the first step would be to partner with non-profit organizations and local…

    • 317 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    You Decide 1

    • 1151 Words
    • 5 Pages

    Issue d) Do I get better tax benefits for paying the lease on office space or for buying the building? What are the differences?…

    • 1151 Words
    • 5 Pages
    Good Essays
  • Satisfactory Essays

    not available

    • 3387 Words
    • 14 Pages

    For many new firms, the most important reason to lease rather than buy a facility is…

    • 3387 Words
    • 14 Pages
    Satisfactory Essays
  • Best Essays

    Tenant Landlord Law

    • 2865 Words
    • 12 Pages

    Well managed investment/rental property can be a great source of income, with tenants who pay on time. If the monthly expenses are less than the rent, it can bring the landlord a reliable source of income to enjoy many pleasures in life.…

    • 2865 Words
    • 12 Pages
    Best Essays
  • Good Essays

    There are two major types of leases; finance lease and operating lease. Under a finance lease, the finance company owns the asset throughout and the agreement covers a set period – considered to be the full economic life of the asset. Often, there is an option to continue leasing at a reduced, or ‘peppercorn’ rate, at the end of the contracted period. As you are not the owner of the asset, you cannot sell the asset during the rental period. The finance company can claim the writing-down allowances and pass this benefit to you in…

    • 558 Words
    • 3 Pages
    Good Essays
  • Good Essays

    If a lease does not meet the criteria for capitalization then it will be classified as an operating lease by the lessee. A capital lease transfers most of the benefits and risks of ownership to the lessee. This should also be accounted for as an acquisition of assets to the lessee. A lease must meet one of four criteria to be considered a capital lease: at the end of the lease the title must be transferred from the lessor to the lessee, the lessee must be able to obtain the asset for less than fair market value, the lease extends for a period of at least 75 percent of the assets estimated economic life, or the lease payments will be greater than 90 percent of the fair market value of the asset at the beginning of the lease. The lessee will pay the full amount of the asset to the lessor without dependency on the residual value of the asset (Schroeder, Clark, & Cathey, 2005).…

    • 707 Words
    • 3 Pages
    Good Essays
  • Satisfactory Essays

    beneficial life. The lessee will get ownership of the equipment at the end of the…

    • 422 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    According to Schroeder, Clark & Cathey, a lease is considered as a sales type lease when there is a manufacturer’s or dealer’s profit or loss which implies that the leased item is considered as an item of inventory and the seller or the lessor is earning a profit on that item (Schroeder, Clark & Cathey, 2005, p. 426). In case of a sales type lease, the fair value and the carrying value of the property would be different. The risks and benefits in a sales type lease flows on to the lessee.…

    • 942 Words
    • 4 Pages
    Good Essays
  • Better Essays

    Eco-Final Paper

    • 1542 Words
    • 4 Pages

    The move will take her business to the next step. This new location will benefit her and it will benefit her pictures. Space is a must when you are working with children and larger groups in photography and this building has plenty of open space to catch all of those fun smiles. This also gives back to the customers, it gives them a more professional feeling when they show up for pictures. It will be a win for both the customers and the photographer.…

    • 1542 Words
    • 4 Pages
    Better Essays
  • Powerful Essays

    A lease is a contractual agreement between two parties the lessor and the lessee. The lessor owns the property and agrees to let the lessee use the property for a period of time for periodic payments. Between the two parties there can be two different types of lease agreements. The first is called an operating lease. With an operating lease, the lessee merely uses the asset of the lessor for a period of time while paying a periodic fee (ex. Monthly rent). In an operating lease there is no transfer of ownership. The second type of lease is called a capital lease which transfers substantially all of the benefits and risk inherent in ownership of property to the lessee. Capital leases can be looked at as an accounting transaction which is basically an installment purchase in the form of a lease agreement.…

    • 3145 Words
    • 13 Pages
    Powerful Essays