If a Leased Asset Has a Negative Residual Value, for Example

question 11

True/False

If a leased asset has a negative residual value, for example, as a result of a statutory requirement to dispose of an asset in an environmentally sound manner, the lessee of the asset could reasonably expect to pay a lower lease rate because the asset does not have a positive residual value.

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Definitions:

Bargain and Sell

A term used in real estate and contract law to refer to a type of conveyance or transfer of property ownership, often without the formalities of a traditional sale.

Convey

To transfer or deliver title, interest, or property from one person to another through a deed or other document.

Quitclaim Deeds

Legal documents used to transfer a claim, interest, or right in property from one party to another without any assurance of the validity of the grantor's claim.

Technical Defects

Flaws or imperfections in a product that affect its operation, often due to errors in manufacturing or design.