Hire Purchase System
The process of Hire Purchase
Features of Hire Purchase
Advantages and Disadvantages of Hire Purchase
Contents of Hire Purchase agreement
Installment Purchase
Important Definitions
Difference between Hire Purchase and Installment Purchase
Difference between Sales and Hire Purchase
Lease
Features of Lease
Merits and Demerits of Lease
Difference between Hire Purchase and Lease
For Videos use the links below
0 Course Introduction:: https://www.youtube.com/watch?v=9km4aXTus5c
1 Financial system and Environment : https://www.youtube.com/watch?v=BC2bAftm43c
2 Participants in a Financial System: https://www.youtube.com/watch?v=IEv_y7_aR7o
3 Functions of a Financial System: https://www.youtube.com/watch?v=T73-Dd8RM4I
4 Financial System and its components: https://www.youtube.com/watch?v=ovkAjEO8YAw
5 Efficiency of a financial system: https://www.youtube.com/watch?v=8xEUtvKYvPc
Financial Services -Nature and scope of financial services- introduction-Objective-meaning of financial services - classification of financial service industry- Challenges Facing the Financial Services Sector
Financial innovation - causes of financial innovation - Innovative Financial Instruments
Financial Service Industry- Emergence and developments- Fund based services - Merchant banking - Non-fund based services - Leasing and hire purchasing- Bill discounting and Factoring- Forfaiting- Securitization- Mutual Funds - Venture capital funds - Depository participants.
Leasing and hire purchase are both financial arrangements.Sonam704174
Leasing and hire purchase are both financial arrangements for acquiring assets. Leasing involves renting an asset for a specified period, while hire purchase allows the buyer to use the asset during the payment period with ownership transferring after the final installment.
Hire Purchase System
The process of Hire Purchase
Features of Hire Purchase
Advantages and Disadvantages of Hire Purchase
Contents of Hire Purchase agreement
Installment Purchase
Important Definitions
Difference between Hire Purchase and Installment Purchase
Difference between Sales and Hire Purchase
Lease
Features of Lease
Merits and Demerits of Lease
Difference between Hire Purchase and Lease
For Videos use the links below
0 Course Introduction:: https://www.youtube.com/watch?v=9km4aXTus5c
1 Financial system and Environment : https://www.youtube.com/watch?v=BC2bAftm43c
2 Participants in a Financial System: https://www.youtube.com/watch?v=IEv_y7_aR7o
3 Functions of a Financial System: https://www.youtube.com/watch?v=T73-Dd8RM4I
4 Financial System and its components: https://www.youtube.com/watch?v=ovkAjEO8YAw
5 Efficiency of a financial system: https://www.youtube.com/watch?v=8xEUtvKYvPc
Financial Services -Nature and scope of financial services- introduction-Objective-meaning of financial services - classification of financial service industry- Challenges Facing the Financial Services Sector
Financial innovation - causes of financial innovation - Innovative Financial Instruments
Financial Service Industry- Emergence and developments- Fund based services - Merchant banking - Non-fund based services - Leasing and hire purchasing- Bill discounting and Factoring- Forfaiting- Securitization- Mutual Funds - Venture capital funds - Depository participants.
Leasing and hire purchase are both financial arrangements.Sonam704174
Leasing and hire purchase are both financial arrangements for acquiring assets. Leasing involves renting an asset for a specified period, while hire purchase allows the buyer to use the asset during the payment period with ownership transferring after the final installment.
This ppt is covering lease finance in detail, covering advantages & disadvantages. Types of lease. Instead of doing hard work rely on smart work. Time you devote on copy pasting. Channelize that time in understanding topic via reading it.
Lease Financing
Terminology
The advantages of leasing
Limitation of leasing
Types of Leasing
Financial lease
Operating lease
Sale and lease back
Leveraged leasing
Direct leasing
Other types
Problems of leasing in India
Tangible market information and stock returns the nepalese evidence synopsisSudarshan Kadariya
This is a synopsis of the work done for the academic fulfillment purpose. The study have assumptions. The findings are suggested to related with its assumptions. I believe this work will help the financial / stock market in Nepal and it will also be accessible and share some features to the international financial market researchers.
Market information and stock returns the nepalese evidenceSudarshan Kadariya
This is a work done for the academic fulfillment purpose. The study have assumptions. The findings are suggested to related with its assumptions. I believe this work will help the financial / stock market in Nepal and it will also be accessible and share some features to the international financial market researchers.
We do have ‘no excuses’ other than learning new things, it is very important to start learning new things specially that has direct impact in your pockets or wallets.
Standardization of services and the democratization of the nepali stock marketSudarshan Kadariya
In the financial and investment services sector, this should be the right timing to discuss the need for standardization or the rating system in Nepal.
Financial Market is a important area of study and its a most practical education where is News on Stock Market is even crucial as the market moves how we share the news coverage of the specific events and how fast we would disseminate them to the public.
Factors Affecting Investor Decision Making: A Case of Nepalese Capital MarketSudarshan Kadariya
From the past decades, the financial market has been suffering from the unforeseen and sudden economic turbulences that have been directly or indirectly contributing for the stock returns. The study primarily analyzes the market reactions to tangible information and intangible information in Nepalese stock market and to examine the investors’ opinions in Nepalese stock market issues. The sample size is 185 stock investors and the response rate is 27 percent. The major findings of the study are: the capital structure and average pricing method is one factor that influence the investment decisions, the next is political and media coverage, the third factor is belief on luck and the financial education, and finally the forth component for stock market movement is trend analysis. Thus, it is concluded that both the tangible and intangible information are essential to succeed in Nepalese capital market.
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
Pi has not yet been launched on any exchange because we are currently using the confined Mainnet. The planned launch date for Pi is June 28, 2026.
Reselling to investors who want to hold until the mainnet launch in 2026 is currently the sole way to sell.
Consequently, right now. All you need to do is select the right pi network provider.
Who is a pi merchant?
An individual who buys coins from miners on the pi network and resells them to investors hoping to hang onto them until the mainnet is launched is known as a pi merchant.
debuts.
I'll provide you the Telegram username
@Pi_vendor_247
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If you are looking for a pi coin investor. Then look no further because I have the right one he is a pi vendor (he buy and resell to whales in China). I met him on a crypto conference and ever since I and my friends have sold more than 10k pi coins to him And he bought all and still want more. I will drop his telegram handle below just send him a message.
@Pi_vendor_247
how can I sell pi coins after successfully completing KYCDOT TECH
Pi coins is not launched yet in any exchange 💱 this means it's not swappable, the current pi displaying on coin market cap is the iou version of pi. And you can learn all about that on my previous post.
RIGHT NOW THE ONLY WAY you can sell pi coins is through verified pi merchants. A pi merchant is someone who buys pi coins and resell them to exchanges and crypto whales. Looking forward to hold massive quantities of pi coins before the mainnet launch.
This is because pi network is not doing any pre-sale or ico offerings, the only way to get my coins is from buying from miners. So a merchant facilitates the transactions between the miners and these exchanges holding pi.
I and my friends has sold more than 6000 pi coins successfully with this method. I will be happy to share the contact of my personal pi merchant. The one i trade with, if you have your own merchant you can trade with them. For those who are new.
Message: @Pi_vendor_247 on telegram.
I wouldn't advise you selling all percentage of the pi coins. Leave at least a before so its a win win during open mainnet. Have a nice day pioneers ♥️
#kyc #mainnet #picoins #pi #sellpi #piwallet
#pinetwork
how to swap pi coins to foreign currency withdrawable.DOT TECH
As of my last update, Pi is still in the testing phase and is not tradable on any exchanges.
However, Pi Network has announced plans to launch its Testnet and Mainnet in the future, which may include listing Pi on exchanges.
The current method for selling pi coins involves exchanging them with a pi vendor who purchases pi coins for investment reasons.
If you want to sell your pi coins, reach out to a pi vendor and sell them to anyone looking to sell pi coins from any country around the globe.
Below is the contact information for my personal pi vendor.
Telegram: @Pi_vendor_247
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the telegram id of my personal pi merchant who i trade pi with.
Tele gram: @Pi_vendor_247
#pi #sell #nigeria #pinetwork #picoins #sellpi #Nigerian #tradepi #pinetworkcoins #sellmypi
how to sell pi coins at high rate quickly.DOT TECH
Where can I sell my pi coins at a high rate.
Pi is not launched yet on any exchange. But one can easily sell his or her pi coins to investors who want to hold pi till mainnet launch.
This means crypto whales want to hold pi. And you can get a good rate for selling pi to them. I will leave the telegram contact of my personal pi vendor below.
A vendor is someone who buys from a miner and resell it to a holder or crypto whale.
Here is the telegram contact of my vendor:
@Pi_vendor_247
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the telegram contact of my personal pi merchant to trade with.
Tele-gram.
@Pi_vendor_247
how to sell pi coins on Bitmart crypto exchangeDOT TECH
Yes. Pi network coins can be exchanged but not on bitmart exchange. Because pi network is still in the enclosed mainnet. The only way pioneers are able to trade pi coins is by reselling the pi coins to pi verified merchants.
A verified merchant is someone who buys pi network coins and resell it to exchanges looking forward to hold till mainnet launch.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
Even tho Pi network is not listed on any exchange yet.
Buying/Selling or investing in pi network coins is highly possible through the help of vendors. You can buy from vendors[ buy directly from the pi network miners and resell it]. I will leave the telegram contact of my personal vendor.
@Pi_vendor_247
2. “Why own a cow when the milk is so cheap? All
you really need is milk and not the cow.”
-By Donald B. Grant
3. Firms generally own fixed assets and report them
on their balance sheet for accounting purpose.
The important point is the use of the assets, not
their ownership. But, how to get the rights to use
the assets?
◦ Option 1: Buy
◦ Option 2: Lease
Ownership of the asset never passes to the
lessee, or with a lease there is often no
agreement for legal ownership of the asset to
pass to the lessee.
4. Prior to the 1950s, leasing was generally
associated with real estate – land and buildings.
Today, however, it is possible to lease virtually any
kind of fixed assets, which is the paradigm shift in
leasing.
In India, the concept was pioneered in 1973 when
the First Leasing Company was set up (in Madras)
and the eighties have seen a rapid growth of this
business.
Lease, as a concept which involves a contract
whereby the ownership, financing and risk taking
of any equipment or asset are separated and
shared by two or more parties.
5. The lessor, who owns the property. The
lessor is pronounced ‘less-or’
The lessee, who obtains use of the property
in exchange for one or more lease, or rental
payments. The term lessee is pronounced
‘less-ee’, not ‘lease-ee’
The third parties – financial intermediaries, in
case of leverage financing.
6. A lease is a commercial arrangement whereby an
equipment owner or Manufacturer conveys the
right to use the equipment in return for a rental.
In other words, lease is a contract between the
owner of an asset (the lessor) and its user (the
lessee) for the right to use the asset during a
specified period in return for a mutually agreed
periodic payment (the lease rentals).
For example, apartments, houses, offices,
automobiles, etc.
7. “A lease is an agreement whereby the lessor
conveys to the lessee, in return for rent, the
right to use an asset for an agreed period of
time. Lessor is a person who conveys to the
another person (lessee) the right to use an
asset in consideration of a payment of
periodic rental, under a lease agreement.
Lessee is a person who obtains from the
lessor, the right to use the asset for a
periodical rental payment for an agreed
period of time.”
8. i) Contract specifies who maintains the asset
Full-service lease -- lessor pays maintenance
Net lease -- lessee pays maintenance costs
ii) Cancelable or noncancelable lease?
Operating lease (short-term, cancelable) vs.
financial lease (longer-term, noncancelable)
iii) Options at expiration to lessee
Transfer of ownership
iv) The parties (two or more), the asset, the term
or period, the rentals, leasing process, etc.
9.
10. Long-term, non-cancellable lease. The essential
point of financial lease agreement is that it
contains a condition whereby the lessor agrees to
transfer the title for the asset at the end of the
lease period at a nominal cost. At lease it must give
an option to the lessee to purchase the asset at the
expiry of the lease.
Under this lease the lessor recovers about 90% of
the fair value of the asset as lease rentals and the
lease period is 75% of the economic life of the
asset. The lease agreement is irrevocable.
11. Practically, all the risks and all the benefits arising in
lease are transferred to the lessee who bears the cost
of maintenance, insurance and repairs. Only title
deeds remain with the lessor.
Financial lease is also known as ‘capital lease’. In
India, financial leases are very popular with high-cost
and high technology equipment.
Key elements in Financial Lease:
i. The lessor will purchase that asset;
ii. The lessee will have use of that asset during the
lease;
iii. The lessee will pay a series of rentals or
installments for the use of that asset;
12. iv. The lessor will recover a large part or all of the
cost of the asset plus earn interest from the
rentals paid by the lessee;
v. The lessee has the option to acquire ownership of
the asset at the end;
vi. The lossor is the legal owner of the asset during
duration of the lease.
iv. The lessee usually has a right to renew the lease at
expiry.
vii. However, the lessee has control over the asset
providing them the benefits and risks.
13. An operating lease stands in contrast to the
financial lease in almost all aspects. This lease
agreement gives to the lessee only a limited right
to use the asset.
The lessor is responsible for the upkeep and
maintenance of the asset. Ordinarily, operating
leases require the lessor to maintain and service
the leased equipment.
The lessee is not given any uplift to purchase the
asset at the end of the lease period.
14. Key elements in Operating Lease:
i. Normally the lease is for a short period;
ii. Revocable at a short notice.
iii. Operating lease which is short-term and where
the asset may be hired to several lessees.
iv. Usually not fully amortized.
v. Usually require the lessor to maintain and insure
the asset.
vi. Lessee enjoys a cancellation option.
For example, computers and office copying machine,
automobiles, trucks and aircrafts, are the primary types
of equipment involve in operating leases, mines,
computers hardware, trucks and automobiles are found
suitable for operating lease because the rate of
obsolescence is very high in this kind of assets.
15. It is a sub-part of finance lease. Under this, the owner
of an asset sells the asset to a party (the buyer), who
in turn leases back the same asset to the owner in
consideration of lease rentals.
However, under this arrangement, the assets are not
physically exchanged but it all happens in records
only. This is nothing but a paper transaction.
Sale and lease back transaction is suitable for those
assets, which are not subjected depreciation but
appreciation, say land. The advantage of this method
is that the lessee can satisfy himself completely
regarding the quality of the asset and after possession
of the asset convert the sale into a lease arrangement.
16. • Under this transaction, the seller assumes the role
of a lessee and the buyer assumes the role of a
lessor. The seller gets the agreed selling price and
the buyer gets the lease rentals.
• It is possible to structure the sale at agreed value
(below or above the fair market price) and to adjust
difference in the lease rentals. Thus the effect of
profit /loss on sale of assets can be deferred.
• The lessor realizes any residual value.
• Lessors: insurance companies, institutional
investors, finance companies, and independent
companies, etc.
17. • Two sets of cash flows occur:
– The lessee receives cash today from the sale.
– The lessee agrees to make periodic lease payments,
thereby retaining the use of the asset.
• The assets and the flow of funds can be explained as
below.
18. Under leveraged leasing arrangement, a third
party is involved beside lessor and lessee. The
lessor borrows a part of the purchase cost (say
80%) of the asset from the third party i.e. lender,
and the asset that purchased put as security
against the loans.
The lender is paid off from the lease rentals
directly by the lessee and the surplus after
meeting the claims of the lender goes to the
lessor.
The lessor, the owner of the asset is entitled to
depreciation allowance associated with the asset.
19. Leveraged Lease framework
For example, popular for big-ticket assets such as
aircraft, oil rigs, and railway equipments, vehicles,
etc.
20. Under direct leasing, a firm acquires the right to
use an asset from the manufacturer directly.
The ownership of the asset leased out remains with
the manufacturer itself.
The major types of direct lessor include:
manufacturers, finance companies, independent
lease companies, special purpose leasing
companies etc like - IBM leases computers and
Xerox leases copiers, etc.
21. There are several extolled advantages of acquiring capital assets
on lease:
(1) SAVING OF CAPITAL: Leasing covers the full cost of the
equipment used in the business by providing 100% finance. The
lessee is not to provide or pay any margin money as there is no
down payment. In this way the saving in capital or financial
resources can be used for other productive purposes e.g.
purchase of inventories.
(2) FLEXIBILITY AND CONVENIENCE: The lease agreement can be
tailor- made in respect of lease period and lease rentals
according to the convenience and requirements of all lessees.
(3) PLANNING CASH FLOWS: Leasing enables the lessee to plan its
cash flows properly. The rentals can be paid out of the cash
coming into the business from the use of the same assets.
(4) IMPROVEMENT IN LIQUADITY: Leasing enables the lessee to
improve their liquidity position by adopting the sale and lease
back technique.
22. Because leasing is beneficial to both lessee and lessor:
For Lessor:
• Ownership of asset
• Lower transaction costs
• Lighter regulations, because they are not deposit
taking institutions.
• Tax incentives (lesser than sales tax)
• Ownership and easy finance
• Better control on utilization of funds, etc.
23. For Lessee:
• Avoidance of initial cash outlay
• Efficient use of funds
• Fewer requirements about balance sheets
• Cheaper source of financing
• Enhanced borrowing capacity (debt/equity ratio)
• No outside security/collateral needed
• Low documentation cost
• Protect against obsolescence
• Leasing can finance a higher % of equipment than
bank loans
• Tax benefits
• Better liquidity (sale and lease back), etc.
24. • Good Reasons
– Taxes may be reduced by leasing.
– The lease contract may reduce certain types of
uncertainty.
– Transactions costs can be higher for buying an
asset and financing it with debt or equity than
for leasing the asset.
• Bad Reasons
– Accounting
25.
26. Leases are evaluated by both the lessor and
the lessee.
The lessee determine whether leasing an
asset is less costly than buying it.
The lessor decide whether the lease payments
provide a satisfactory return on the capital
invested in leased asset.
Lease evaluation consist the following steps:
27. Decide to acquire the asset: In a lease analysis, the
concern is whether to obtain the use of the
machine by lease or by purchase.
How to finance the acquisition: Capital to finance
new assets must be obtained from some source
i.e. cash flows, equity, debt, etc. Alternatively, the
assets could be leased.
Comparison between lease vs debt financing: A
lease is comparable to a loan in the sense that the
firm is required to make a specified series of
payments, and a failure to meet these payments
could result in bankruptcy. If a company has a
target capital structure, then $1 lease financing
displaces $1 of lease financing. Thus, the most
appropriate comparison is lease financing versus
debt financing.
28. Cost of leasing
Lt = Lt(1-T) x PVIFA kdt,n
(When lease payment is made at the end of the year)
Lt = Lt + Lt(1-T) x PVIFA kdt, n – Lt x T x PVIF kdt, n
(When lease payment is made in advance)
Cost of buying
Cost = Io – (ITC+D x T x PVIFA kd, n + Salvage value x PVIF kdt, n)
Net advantage of leasing (NAL)
NAL = PV cost of owing – PV cost of leasing
Decision: If NAL is positive, lease the asset
If NAL is negative, buy the asset
29. Given,
Borrowing and buying
life = 10 years
Cost = $ 10 million
Plan to use only for 5 years
Borrowing cost = 10% before tax
Estimated scrap after 10 years = $ 50,000
Estimated salvage value (CSV) 5 years = $ 1,000,000 before tax
Maintenance cost = $ 500,000 per year payable at the beginning of each year
Depreciation = MACRS 5 year class life
Tax = 40%
Leasing
lease period = 5 years
Rental/ lease payment = $ 2,750,000 at the beginning of each year
Required: Make the lease evaluation.
30. Lease analysis, lessee’s point of view
(Amt in thousand) Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
A. Cost of borrowing and buying
1. After tax loan payment ($10m x 6%) (600) (600) (600) (600) (10600)
2. Maintenance cost (500) (500) (500) (500) (500)
3. Maintenance tax saving (500 x 40%) 200 200 200 200 200
4. Depreciation tax saving 800 1280 760 480 440
5. Residual value (CSV) 1000
8. Tax on residual claim (1000-600) x 40%) (160)
Net cash flow (300) (100) 380 (140) (420) (9320)
PVIF 6%, 5 years 1 0.943 0.890 0.840 0.792 0.747
PV of owing = $ 7468.38 (300) (94) 338 (118) (333) (6962)
B. Cost of leasing
1. Lease payment (2750) (2750) (2750) (2750) (2750)
2. Lease rent tax saving (2750 x 40%) 1100 1100 1100 1100 1100
3. Net cash flow (1650) (1650) (1650) (1650) (1650)
PVIF 6%, 5 years 1 0.943 0.890 0.840 0.792
PV of leasing = $7367.25 (1650) (1556) (1469) (1386) (1307)
Note: Assuming that lease payment at the beginning of the year do not change the tax
effect
31. Net advantage of leasing (NAL) = PV of owing - PV of leasing
= (7468.38 -7367.25)
= 101.13
Decision: Since, the NAL is positive, it is wise to lease the equipment.
Working note:
Year 1 Year 2 Year 3 Year 4 Year 5
Dep. Rate 0.2 0.32 0.19 0.12 0.11
Dep. 2000 3200 1900 1200 1100
Dep. Tax saving 800 1280 760 480 440
Cost 10000
Less: Depn 9400
Book value 600