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.

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Definitions:

Nutrients

Substances obtained from food that are vital for growth, maintenance of the body, and energy supply.

Estuaries

Coastal water bodies where freshwater from rivers and streams mixes with saltwater from the ocean, creating an ecologically rich environment.

Salinity

The concentration of dissolved salts in water, affecting the density, biodiversity, and chemical behavior of aquatic environments.

Fluctuation

A variation or change in a state, quantity, or level, often without a set pattern or rhythm.