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1.If the asset is so expensive that there is no single source of finance that can finance it e.g aircrafts.
2.Under conditions of credit squeeze or restrictive credit control.
3.If the company cannot obtain securities to cover a loan to finance this type of asset.
4.if the asset will meet the company’s future expansion programmes
5.If the asset is not very sensitive to technology.
6.If the company is highly geared and cannot borrow to finance such an asset.
sharon kalunda answered the question on April 16, 2019 at 14:26
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