Respuesta :
This problem depends on a few variables, such as long term rental growth rates and interest rates, but generally, the answer is:
C) Owning provides less flexibility but can lead to lower costs in the long term.
Owning eliminates the periodic expense that comes with renting something, aside from the interest paid if money is lent for the purchase. Even in the case of paying a mortgage or some form of monthly payment to pay down the purchased item, you have the guarantee that you will pay the same amount every period, while the cost of renting something can fluctuate.
It is, however, less flexible to own rather than rent. There are more costs and inconveniences associated with selling property than with terminating a lease, and in the case of an asset that depreciates, there can be a significant loss on resale that makes selling even more costly.
C) Owning provides less flexibility but can lead to lower costs in the long term.
Owning eliminates the periodic expense that comes with renting something, aside from the interest paid if money is lent for the purchase. Even in the case of paying a mortgage or some form of monthly payment to pay down the purchased item, you have the guarantee that you will pay the same amount every period, while the cost of renting something can fluctuate.
It is, however, less flexible to own rather than rent. There are more costs and inconveniences associated with selling property than with terminating a lease, and in the case of an asset that depreciates, there can be a significant loss on resale that makes selling even more costly.
Option C is correct. Owning provides less flexibility but can lead to lower costs in the long term.
Further Explanation:
Owning means to get possession of something. For example, acquire the property, purchased machinery, and purchased equipment. Owning provides less flexibility because, at the time of purchasing, it requires a huge amount of money. The owner does not want to invest a huge amount of money repetitively. That is why it provides less flexibility. Owning can lead to lower costs in the long term. For example, the rent for five years is more than the actual cost of the property. That's why it can lead to lower costs in the long term.
Justification for the correct and incorrect answer:
A.
Greater; lower: This option is incorrect.
Owning does not provide greater flexibility but can lead to lower costs in the long term. Renting provides greater flexibility, as the owner is flexible to change their home repetitively according to their needs.
B.
Greater, higher: This option is incorrect.
Owning does not provide greater flexibility and also cannot lead to higher costs in the long term. Renting provides greater flexibility, as the owner is flexible to change their home repetitively according to their needs. Renting leads to higher costs, as changing the home repetitively creates an extra cost of transferring the things.
C.
Less; lower: This option is correct.
Owning provides less flexibility because, at the time of purchasing, it requires a huge amount of money.Owning can lead to lower costs in the long term.
D.
Less; higher: This option is incorrect.
Owning provides less flexibility because, at the time of purchasing, it requires a huge amount of money.The owner may not be able to invest a huge amount of money repetitively. That’s why it provides less flexibility. But owning does not lead to higher costs in the long term.
Learn more:
1. Learn more about renting
https://brainly.com/question/2288011
2. Learn more about owning
https://brainly.com/question/2731676
3. Learn more about the purchase of a car
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Answer details:
Grade: Middle School
Subject: Accounting
Chapter: Owning vs. Renting
Keywords: Owning, less flexibility, can lead, lower cost, renting, in the long term.
