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Unformatted text preview: c. A financial lease is a lease that does not provide for maintenance services, is not cancelable, and is fully amortized over its life; also called a capital lease. d. An important characteristic of operating leases is the fact that they are frequently fully amortized; in other words, the payments required under the lease contract are sufficient to recover the full cost of the equipment. e. None of the statements above. i . Lease cash flows Answer: c Diff: E ii . Operating lease Answer: e Diff: E iii . Leasing Answer: c Diff: E N Statement a is the definition of an operating lease. Statement b is the definition of the lessee. Statement d is incorrect; an important characteristic of an operating lease is that they are frequently not fully amortized. Therefore, the correct statement is c....
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This note was uploaded on 08/04/2011 for the course COMM 101 taught by Professor Sy during the Spring '11 term at USC.
- Spring '11