For Which of the Assets Listed Below Would an Operating

question 111

Multiple Choice

For which of the assets listed below would an operating lease typically be used?

• A) A large and expensive piece of machinery
• B) A building
• C) A $20 000 computer system
• D) Land

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Definitions:

Benefit

An advantage or positive outcome gained from something, often used in the context of employment perks or features of a product or service.

Moral Hazard

Moral hazard occurs when one party in a transaction takes on more risk because they know that someone else will bear the cost of those risks.

Transaction

The act of conducting business between two or more parties, often involving the exchange of goods, services, money, or information.

Moral Hazard

A situation in which one party is more likely to take risks because they know that another party bears the consequences or costs of those risks.