Which of the Following Is NOT a Benefit of a Sale-Leaseback

question 3

Multiple Choice

Which of the following is NOT a benefit of a sale-leaseback of land for investors?

• A) It is a way of effectively obtaining 100% financing
• B) The lease payments are tax deductable
• C) Land can not be depreciated for tax purposes
• D) The land value may increase over the holding period

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Definitions:

Issue Bonds

The act of a corporation or government borrowing money from investors by selling them bond securities.

Sold For

Refers to the final price at which a product, asset, or service is sold to a buyer in a transaction.

Bond Premium

The additional amount over the face value that investors are willing to pay for a bond, typically because it offers a higher interest rate than the prevailing market rate.

Annual Interest Payment

The total amount of interest to be paid each year on a loan, bond, or other financial instrument.