Which One of These Conditions Must Be Met for a Lease

question 156

Multiple Choice

Which one of these conditions must be met for a lease to qualify as a capital lease?

• A) the lease contains a bargain purchase price at the end of the lease
• B) the lease term is equal to 75% or more of the estimated life of the leased property
• C) the present value of the minimum lease payments equals 90% or more of the fair value of the leased property at the inception of the lease.
• D) all of the other answers are correct.

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Definitions:

Recession

A phase of short-term economic downturn where business activities and manufacturing diminish, usually signaled by two successive quarters of GDP decrease.

Nominal GDP

Measures a country's gross domestic product using current prices, without adjusting for inflation or deflation, providing a raw economic output figure.

Real GDP Per Person

A measure of the economic output of a country adjusted for price changes (inflation or deflation) and divided by the total population.

Nominal GDP

The gross domestic product calculated at current market prices, reflecting the economy's size without accounting for inflation's effects.