An Analyst Should Consider Whether a Company Acquired Assets Through

question 66

Multiple Choice

An analyst should consider whether a company acquired assets through a capital lease or an operating lease because a company may structure:

• A)leases to be treated like capital leases to enhance its leverage ratios.
• B)leases to be treated like capital leases to enhance its cash flow.
• C)leases to be treated like operating leases to lower its debt to equity ratio.
• D)leases to be treated like operating leases to enhance its cash flow.

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Definitions:

Element

A pure chemical substance consisting of one type of atom, distinguished by its atomic number.

Cell Membrane

The semi-permeable membrane surrounding the cytoplasm of a cell, responsible for controlling the movement of substances in and out of the cell.

Body Tracts

Pathways or channels in the body through which biological substances flow, such as the gastrointestinal tract or neural tracts.

Matter

Anything that takes up space and has weight. Liquids, solids, and gases are matter.