Crumple Car Rentals is planning to expand into the western part of the U.S. and needs to acquire approximately 400 additional automobiles for rental purposes. Crumple%u2019s cash reserves were substantially depleted in replacing the bumpers on existing automobiles with new ones; therefore, the expansion funds must be acquired from external sources. Crumple%u2019s management has identified three options:

• Issue additional debt.
• Create a wholly owned leasing subsidiary that would borrow the money with a guarantee for payment from Crumple. The subsidiary would then lease the cars back to Crumple.
• Create a trust that would borrow the money with a guarantee for repayment from Crumple and lease the cars to it. In the event of liquidation, the residual value of the trust would revert to an outside third party, the Historical Preservation Society of Pleasantville.

The acquisition price of the cars is approximately the same under all three alternatives.Compare and contrast the three options given on the basis of the points listed below:

• The impact on Crumple%u2019s consolidated balance sheet.
• Their legal ramifications.
• The ability to control the repair, maintenance, and replacement of the automobiles.

According to you, which one is the best alternative among the three and why? Justify your answer with appropriate reasoning.