chap026+practice

chap026+practice - CHAPTER 26 Leasing I DEFINITIONS LESSEE...

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CHAPTER 26 Leasing I. DEFINITIONS LESSEE a 1. The user of an asset in a leasing arrangement is called the . a. lessee b. lessor c. guarantor d. trustee e. manager LESSOR b 2. The owner of an asset in a leasing arrangement is called the . a. lessee b. lessor c. guarantor d. trustee e. manager OPERATING LEASE c 3. A shorter-term lease under which the lessor is responsible for insurance, taxes, and upkeep, while the lessee can cancel the lease on short notice, is called a(n) . a. open lease b. straight lease c. operating lease d. financial lease e. tax-oriented lease FINANCIAL LEASE d 4. A longer-term, fully-amortized lease under which the lessee is responsible for insurance, taxes, and upkeep, and which the lessee generally cannot cancel without penalty, is called a(n): a. Open lease. b. Straight lease. c. Operating lease. d. Financial lease. e. Tax-oriented lease. SALE AND LEASEBACK b 7. A financial lease in which the lessee sells an asset to the lessor and then leases it back is called a(n) . a. leveraged lease b. sale and leaseback c. operating lease d. tax-oriented lease e. straight lease NET ADVANTAGE TO LEASING
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CHAPTER 26 c 8. The NPV that is calculated when deciding whether to lease an asset or to buy it is called the: a. Open interest net present value. b.
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chap026+practice - CHAPTER 26 Leasing I DEFINITIONS LESSEE...

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