To Determine Whether or Not an Operating Lease Should Be

question 80

Multiple Choice

To determine whether or not an operating lease should be cancelled early, the lessee should compare the:

• A) Number of months they have leased the asset to the number of months remaining in the lease period.
• B) Present value of the future lease payments to the amount already invested in the lease.
• C) Future value of the asset to the salvage value at the time the lease expires.
• D) Present value of the future lease payments to the value they place on the asset at that point in time.
• E) Rate of return on the lease to their current internal financing cost.

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Definitions:

Symmetric

Characterized by or exhibiting symmetry; having identical shape, size, and position on both sides of a dividing line.

Unimodal

Describing a distribution with a single peak or mode.

Stem-And-Leaf Display

A graphical method of displaying quantitative data to show its distribution, using digits to represent the stems and leaves.

Annual Precipitation

The total measure of rainfall and other forms of precipitation, such as snow, that fall in a given area over the course of a year.