Operating Leases Often Have Terms That Include

question 21

Multiple Choice

Operating leases often have terms that include

• A) full amortization over the life of the lease.
• B) very high penalties if the lease is canceled.
• C) restrictions on how much the leased property can be used.
• D) much longer lease periods than for most financial leases.
• E) maintenance of the equipment by the lessor.

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Definitions:

Industry Output

The total production of goods and services by all firms in a specific industry over a given period.

Market Supply Curve

A graph showing the total quantity of a good that producers are willing to sell at different prices.

Easy Entry

A characteristic of market structures where new competitors can easily enter the market without significant barriers or cost.

Constant-Cost Industry

An industry in which the costs of production, including input prices, do not change as the industry's output changes.