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Unformatted text preview: ch21 Student: _______________________________________________________________________________________ Multiple Choice Questions 1. In a lease arrangement, the owner of the asset is: A. the lesser. B. the lessee. C. the lessor. D. the leaser. E. None of the above. 2. In a lease arrangement, the user of the asset is: A. the lesser. B. the lessee. C. the lessor. D. the leaser. E. None of the above. 3. Which of the following would not be a characteristic of a financial lease? A. They are not usually fully amortized. B. They usually require the lessor to maintain and insure the leased assets. C. They usually do not include a cancellation option. D. The lessee usually has the right to renew the lease at expiration. E. All of the above are characteristics of financial leases. 4. An independent leasing company supplies ___________ leases versus the manufacturer who supplies ________________ leases. A. leveraged; direct B. sales and leaseback; sales-type C. capital; sales-type D. direct; sales-type E. None of the above 5. Which of the following is not a financial lease? A. A leveraged lease B. An operating lease C. A sale-and-leaseback D. Both A and B. E. None of the above. 6. If the lessor borrows much of the purchase price of a leased asset, the lease is called: A. a leveraged lease. B. a sale-and-leaseback. C. a capital lease. D. a nonrecourse lease. E. None of the above. 7. An operating lease's primary characteristics are: A. fully amortized, lessee maintain equipment and there is not cancellation clause. B. not fully amortized, lessor maintains equipment and there is a cancellation clause. C. fully amortized, lessor maintain equipment and there is a cancellation clause. D. not fully amortized, lessor maintains equipment and there is not cancellation clause. E. fully amortized, lessee maintain equipment and lessee can acquire assets at end of lease for fair market value. 8. If a lease is for 35 years, it is regarded as a: A. financial lease. B. operating lease. C. capital lease. D. conditional sale. E. sale and leaseback. 9. The city of Oakland sold some buildings and used the proceeds to improve its financial position. The city then leased the buildings back in order to continue to use these facilities. This is an example of: A. an operating lease. B. a short-term lease. C. a sale and leaseback. D. a fully amortized lease. E. None of the above. 10. A financial lease has which as its primary characteristics: A. is fully amortized, lessee maintains equipment and there is no renewal clause and no cancellation clause. B. is not fully amortized, lessor maintains equipment and there is a renewal clause but no cancellation clause. C. is fully amortized, lessor maintains equipment and there is a renewal clause and a no cancellation clause....
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This note was uploaded on 12/21/2011 for the course NIKA 101 taught by Professor Temur during the Spring '11 term at Acton School of Business.
- Spring '11