Which one of the following is the least worthy reason for leasing rather than purchasing an asset?

A) reduction in uncertainty
B) less encumbered assets than secured borrowing
C) lower taxes
D) less restrictive covenants than secured borrowing
E) to improve the appearance of the financial statements

Encumbered Assets

Assets that are used as security or collateral for a loan or debt, restricting their free use or disposal by the owner.

Secured Borrowing

A type of loan in which the borrower pledges an asset as collateral for the loan, which the lender can claim if the loan defaults.

Financial Statements

Formal records that outline the financial activities and condition of a business, including the balance sheet, income statement, and cash flow statement.