Which of the Following Statements Is Most CORRECT

question 15

Multiple Choice

Which of the following statements is most CORRECT?

• A) Capitalizing a lease means that the firm issues equity capital in proportion to its current capital structure, in an amount sufficient to support the lease payment obligation.
• B) The fixed charges associated with a lease can be as high as, but never greater than, the fixed payments associated with a loan.
• C) Capital, or financial, leases generally provide for maintenance by the lessor.
• D) A key difference between a capital lease and an operating lease is that with a capital lease, the lease payments provide the lessor with a return of the funds invested in the asset plus a return on the invested funds, whereas with an operating lease the lessor depends on the residual value to realize a full return of and on the investment.
• E) Finance leases usually have a cancelation feature.

---

Definitions:

Withdrawal

The process of reducing or stopping the intake of a substance to which one has become addicted, often accompanied by unpleasant symptoms.

Hassles

Minor irritations and annoyances that are part of everyday life and can accumulate to impact one's mental health and well-being.

Psychological Hardiness

Refers to a personality characteristic that involves a sense of control, commitment, and embracing challenge as a means of personal growth, which helps individuals to manage stress more effectively.

Stress

The body's response to any demand or challenge, which can be triggered by both positive and negative experiences.