- Published: October 26, 2022
- Updated: October 26, 2022
- University / College: Indiana University Bloomington
- Language: English
- Downloads: 36
The multiples and ratios will not be affected the same as it would be if it was debt. There are disadvantages of a financial lease over debt. A financial lease is more complicated, and it more difficult to set-up, and harder to find a counter party. There are multiple sources that are offering debt, and it is much easier for a company like the National Railroad Passenger Corporation to obtain debt than it is to establish a financial lease. The National Railroad Passenger Corporation has three financing options available to hem to choose from.
They Include: Take on debt to fund the purchase The advantages to this is it is the easiest method for National Railroad.
Based on the financial statements of National Railroad, they can easily obtain debt from a financial institution in order to make the purchase. A disadvantage is the liability is recorded in full on the balance sheet. Financial institutions, such as FANCY, can lease the equipment to the National Railroad Passenger Corporation The advantage for National Railroad Is the method that the liability Is recorded on he financial statements.
Because It Is a lease, the allowably on the balance sheet Is not the same amount in option one. (c) Obtain federal funding Congress has agreed to allow funding to continue for funding Amtrak for capital appropriations. Federal grant monies could be used.
A disadvantage to using federal funding would be grant money may not be available in the future. And future expenses may be more important than this. Future expenses could include safety overhauls or major Infrastructure related projects. 3.
The alternative that I would choose Is to rely on federal sources. Although the disadvantage Is that the grant money Is a premium and precious commodity and may not be available in the future if it is used now.
But, if it is not used now, federal sources may not De available In ten Torture even IT It Is not uses railroads are considered the least important of all of the Especially slice transportation infrastructures. Federal sources could be pulled from the railroad industry in order to give the money to the airline sector.
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