From the Lessee's Point of View, If the Net Present

question 78

Multiple Choice

From the lessee's point of view, if the Net Present Value of a lease equals zero, then...

• A) ...the lessee would be paying the lowest payments possible while the lessor gets a return that just covers the cost of capital
• B) ...the lessor is charging the maximum annual lease rate (payment) possible, and the lessee would be better off purchasing the asset
• C) ...there is nothing to gain from the lease, and it is preferable to purchase the asset
• D) ...the cost of leasing equals the cost of purchasing the asset

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Definitions:

Dry-Cleaning Chemicals

These are the chemicals used in the process of dry cleaning, which is a method of cleaning clothes and textiles using a solvent other than water.

Nominal Damages

A symbolic small amount of money awarded in court to recognize that a legal wrong has occurred, without the plaintiff having suffered significant loss.

Plaintiff

The party who initiates a lawsuit or legal action, seeking relief or damages from the defendant.

General Damages

Restitution for losses naturally expected from a breach of contract.