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For the Lessor, What Is the General Criterion for Deciding

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For the lessor, what is the general criterion for deciding whether a lease is an operating or a finance lease?


Definitions:

Returns To Scale

The rate at which output increases as inputs are increased proportionally in the production process.

Input

Resources, materials, or data entered into a system for processing or production.

Production Function

A mathematical representation of the relationship between inputs (such as labor and capital) and the maximum amount of output that can be produced from those inputs.

Factors Of Production

The inputs or resources that are used in the production of goods and services, traditionally categorized as land, labor, capital, and entrepreneurship.

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