Which Statement Is Correct About the "Guaranteed Residual Value

question 27

Multiple Choice

Which statement is correct about the "guaranteed residual value"?

• A)It is an indicator that the lessee will take care of the property.
• B)It is provided by the lessor.
• C)Lessor assumes the risk of the property falling below the guaranteed amount.
• D)It is not included in the present value of the lease payment calculation.

---

Definitions:

Prime Interest

The interest rate that commercial banks charge their most creditworthy customers, often used as a reference rate for loans.

Float

The time difference between writing a check and the actual withdrawal of funds from the bank account, or in securities trading, it's the number of shares available for trading by the general public.

Fair Value

An estimate of the price at which an asset or liability could be exchanged between knowledgeable, willing parties in an arm's length transaction.

Exit Price

The amount one would earn from selling an asset or the cost to transfer a liability during a well-organized sale between parties in the market.