Governmental Entities Enter into Capital Leases, Rather Than Conventional Buy

question 16

Multiple Choice

Governmental entities enter into capital leases, rather than conventional buy and borrow arrangements for which of the following reasons? Capital leases

• A)May be an effective means of circumventing debt limitations.
• B)Are less expensive overall than buy and borrow arrangements.
• C)Reduce the cash outflows related to the asset acquisition.
• D)Have less effect on governmental fund balances than buy and borrow arrangements.

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