The Cost of a Lease Should Be

question 3

Multiple Choice

The cost of a lease should be
________ to
________ percent of sales.

• A) 2, 6
• B) 7, 14
• C) 10, 18
• D) 5, 8

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Definitions:

Initial Cost

The original cost of acquiring an asset, including the cost of purchase and other expenses necessary to get the asset ready for its intended use.

Book Value

The value of an asset as it appears on a balance sheet, calculated by subtracting any associated depreciation or amortization from its original cost.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded for an asset since it was put into service, reducing its book value on the balance sheet.

Machinery

Equipment or devices that perform specific tasks, often used in production and manufacturing processes.