ABC INCEntered into a Sales-Type Lease to Lease JKL an Asset

question 133

Multiple Choice

ABC INC.entered into a sales-type lease to lease JKL an asset that cost ABC INC. $120,000.The lease agreement requires five annual year-end rentals of $40,000 each.ABC INC.used a 15 percent interest rate to compute the rentals.The dealer's profit (or loss) that ABC INC.recognized was:

• A)$14,086 gain.
• B)$18,000 gain.
• C)$14,086 loss.
• D)$80,000 gain.

---

Definitions:

Probability Density Functions

Functions that describe the relative likelihood for a continuous random variable to take on a given value.

Continuous Random Variables

Variables that can take an infinite number of values within a given range, often associated with measurements in time, distance, or temperature.

Area Under the Curve

A measure used in various statistical analyses to quantitatively summarize the shape of a curve, often related to the performance of a model or the distribution of data.

Standard Normal Random Variable

A random variable that has a mean of zero and a standard deviation of one, following a normal distribution.