What Is the Incremental Borrowing Rate

question 83

Multiple Choice

What is the incremental borrowing rate?

• A)The interest rate that the lessor would have to pay on a similar lease or loan.
• B)The interest rate that the lessee would have to pay on a similar lease or loan.
• C)The risk adjusted interest rate from the cash flow stream expected by the lessor.
• D)The risk adjusted interest rate from the cash flow stream expected by the lessee.

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Definitions:

Excessive

Going beyond what is normal, usual, or necessary; characterized by overabundance.

Debilitating

Causing weakness or an inability to function properly.

Stimulus-Based Definition

A description that focuses on identifying and explaining the specific external factors that provoke a particular response.

Stress

A physical, mental, or emotional factor that causes bodily or mental tension and may arise from various situations or thoughts that make someone feel frustrated, angry, or nervous.