A Normative Statement

question 79

Multiple Choice

A normative statement

• A)is one that involves a value judgment.
• B)has no place in the study and practice of economics.
• C)concerns what is provable.
• D)can be derived logically from facts.
• E)is a statement that is empirically testable.

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Definitions:

Implicit Lease Rate

An inferred interest rate in a lease agreement, calculated from the lease payments, the fair value of the leased asset, and the residual value.

Present Value Interest Factors

A factor used to calculate the present value of a future amount when the interest rate and period are known.

Guaranteed Residual Value

Guaranteed Residual Value is an assurance that the value of an asset at the end of its lease term will be at least a specified amount.

Maintenance Agreement

A contract between a service provider and a client that outlines the terms for the maintenance of equipment, buildings, or software.