What type of financing can capital leases include?

Capital leases can include lease-purchase arrangements because they allow the lessee to effectively finance the acquisition of an asset while retaining the option to purchase it at the end of the lease term. This method is particularly beneficial for entities that require the use of an asset without committing to its outright purchase initially.

Lease-purchase arrangements combine both leasing and purchasing elements, where payments made during the lease period contribute towards the eventual ownership of the asset. This structure can also provide budgetary advantages, allowing organizations to manage cash flows more effectively while still fulfilling their operational needs.

The other options, while they describe different forms of financing, do not accurately represent the nature of capital leases. Installment loans, personal loans, and real estate loans have distinct characteristics that do not align with the concept of capital leases which focus on the use of leased assets and the potential for ownership transfer.