Question

In purchasing an existing business, Alice has decided to lease the equipment and fixtures from the original owner rather than purchasing it outright to save money initially. This is an example of ______.

Answer 1

Answer: thinning the assets

Explanation:

Thinning the assets refers to the reduction of the burden of an asset on the buyer by the seller do that the business can be priced at a reasonable value for the buyer. It is done to make a business more affordable.

Since Alice decided to lease the equipment and fixtures from the original owner rather than buying it outright to save money initially, this is thinning the assets.