Final answer:
The item not a benefit to the lessor is off-balance sheet financing; this is a benefit to the lessee.
High residual value, interest revenue, and tax incentives are all benefits to the lessor.
Step-by-step explanation:
The question is asking which of the listed items is not a benefit to the lessor in a leasing agreement. Among the options provided, 'off-balance sheet financing' is not a benefit to the lessor; rather, it is a benefit to the lessee. Off-balance sheet financing allows lessees to keep certain financial obligations off their balance sheets, thus improving financial ratios.
On the other hand, high residual value, interest revenue, and tax incentives are indeed benefits to lessors. A high residual value indicates that the asset the lessor is leasing out will retain its value over time, resulting in a better return on the investment.
Interest revenue is earned by the lessor on the financing portion of lease payments. Tax incentives may also be available to lessors, depending on the lease structure and tax regulations, which can reduce their taxable income.
The answer is high residual value. A lessor is the individual or company that owns an asset and leases it to another party, known as the lessee.
In leasing agreements, the lessor benefits from a high residual value because it means that the asset will retain its value or have a higher resale value at the end of the lease term. This can result in a higher return for the lessor when the asset is eventually sold.