I am always nervous about the first and last classes of the year. So I wanted to write out some notes for today’s class. When I began typing I just wanted to recap what the semester. But that has been done before. So I guess these are either the some of the notes to the last class or to the first graduation address. Or both! There are two types of lease financing viz. Operating lease contract and Financial lease contract. Under Operating lease contract Lessor selects and buys the equipments or automobiles and leases it to the lessee, Lessor bears the insurance, maintenance and repair cost of the equipments or automobiles. Whereas in case of Financial lease contract Lessor just acts as financier, lessee can select and buy the equipments or automobiles based his requirements with the financial help from Lessor, Lessee bears the cost of insurance, repair and maintenance cost of the equipments or automobiles under contract period.
However, unlimited profit maximization cannot be defended by any reasonable ethical theory. The idea that corporations should pursue the interests of their shareholders, takes its starkest form in the sentiment expressed by Milton Friedman, that ‘‘the social responsibility of business is to increase its profits” (Friedman, 1970). Friedman is very clear in stating that it is illegitimate for a corporation to act in a way that is detrimental to shareholder returns. Profit maximization is thus a moral imperative for corporate executives. The interests of groups other than the shareholders should thus only be given weight to the extent that pursuing these interests also benefits the shareholders. For instance the implication of CSR is permissible only if it is insincere i.e. used as an instrument to promote shareholder interests (Bakan, 2004).
Apparently it’s not a perfect world so it’s key to understand what will work and what doesn’t. By the way the ability to value your business in connection with a sale or merger also is a key benefit to understanding the balance sheet. You’re then in a better position to benefit from ‘ all star ‘ financing alternatives from banks or non bank alternative lenders.