In the Lease-Versus-Buy Decision,leasing Is Often Preferable

question 7

Multiple Choice

In the lease-versus-buy decision,leasing is often preferable

• A)because it has no effect on the firm's ability to borrow to make other investments.
• B)because, generally, no down payment is required, and there are no indirect interest costs.
• C)because lease obligations do not affect the firm's risk as seen by investors.
• D)because the lessee owns the property at the end of the lease term.
• E)because the lessee may have greater flexibility in abandoning the project in which the leased property is used than if the lessee bought and owned the asset.

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Definitions:

Biorhythm

A hypothetical cycle of physical, emotional, or intellectual fluctuations believed to affect human behavior.

Gonads

The reproductive organs in animals and humans that produce gametes (sperm in males, eggs in females); testes in males and ovaries in females.

Pituitary

A small, crucial gland located at the base of the brain responsible for regulating important functions by releasing hormones into the bloodstream.

Circadian Rhythms

Natural, internal processes that regulate the sleep-wake cycle and repeat roughly every 24 hours.