Which of the Following Would NOT Be Considered an Advantage

question 9

Multiple Choice

Which of the following would NOT be considered an advantage that an investor might consider under a sale-leaseback of land?

• A)The sale-leaseback in effect provides 100% financing on the land
• B)Lease payments are tax deductible
• C)The sale-leaseback provides the same depreciation deductibility with a smaller equity investment
• D)The land may appreciate over the holding period

---

Definitions:

Snob Effect

A phenomenon where the demand for a certain good increases as the price increases because the good is perceived as being more desirable, exclusive, or prestigious.

Luxury Goods

High-quality, expensive items that are not essential but are desired for their status symbol and prestige.

Inelastic Demand

A situation where the demand for a product or service does not significantly change in response to a price change, indicating consumers’ willingness to buy regardless of price adjustments.

Log-Linear Form

A mathematical representation where variables are transformed using a logarithm, making multiplicative relationships appear linear.