Which Statement Is Correct in Comparing Capital Leases to Operating

question 124

Multiple Choice

Which statement is correct in comparing capital leases to operating leases?

• A) A capital lease will have a higher asset turnover compared to an operating lease.
• B) A capital lease will increase the return on total assets compared to an operating lease.
• C) A capital lease will have a lower debt-to-equity ratio compared to an operating lease.
• D) A capital lease will have a higher debt-to-equity ratio compared to an operating lease.

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Definitions:

Self-Disclosure

The act of sharing intimately personal information about oneself with others.

Hidden Area

In the context of the Johari Window, it refers to information about oneself that is known to others but unknown to oneself.

One-Way Communication

A form of communication where information flows from the sender to the receiver without any feedback or interaction from the latter.

Leveling

Leveling refers to the process of making things equal or equivalent, especially in the context of communication, it can mean ensuring all parties have the same information.