Which of the Following Is Most CORRECT

question 43

Multiple Choice

Which of the following is most CORRECT?

• A)Firms that use "off-balance-sheet" financing, such as leasing, would show lower debt ratios if the effects of their leases were reflected in their financial statements.
• B)Capitalizing a lease means that the firm issues equity capital in proportion to its current capital structure, in an amount sufficient to support the lease payment obligation.
• C)The fixed charges associated with a lease can be as high as, but never greater than, the fixed payments associated with a loan.
• D)Capital, or financial, leases generally provide for maintenance by the lessor.
• E)A key difference between a capital lease and an operating lease is that with a capital lease, the lease payments provide the lessor with a return of the funds invested in the asset plus a return on the invested funds, whereas with an operating lease the lessor depends on the residual value to realize a full return of and on the investment.

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Definitions:

Synchondrosis

A type of cartilaginous joint where bones are joined by hyaline cartilage, allowing for bone growth or slight movement.

Gomphosis

A gomphosis is a type of fibrous joint that anchors a tooth to its socket in the jawbone.

Growing Long Bone

Refers to the process of lengthening in bones of the skeleton during childhood and adolescence through the activity at growth plates.

Arm

A limb on the human body extending from the shoulder to the wrist, enabling a wide range of motion and dexterity.