A company plans to acquire new machinery.
It has two financing options; buy outright using a bank loan, or a finance lease.
Which of the following is an advantage of a finance lease compared with a bank loan?
It is "off-balance sheet" and will not affect the company's gearing.
The interest rate offered might be more favourable because the lessor has the security of the asset.
Tax depreciation allowances may be passed on to the company by the lessor.
The lessor provides maintenance of the asset.
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