When Financing for a Property Purchase Is Needed, Financing Is

question 56

True/False

When financing for a property purchase is needed, financing is often obtained by going to a financial institution and obtaining a loan to pay for the property in exchange for which the lender receives a security interest in the property called a title.

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Definitions:

Operating Leases

A pact that grants permission to use a property without bestowing ownership rights of the said asset.

Long-Term Debt Rate

The interest rate applied to loans or borrowings with a maturity date extending beyond one year.

Minimum Operating Lease Payments

The minimum amount that a lessee is obligated to pay over the lease term for the right to use an underlying asset, excluding costs such as maintenance and taxes that are paid by the lessee.

Sales-Type Lease

A lease agreement in which the lessor recognizes immediate profit on the leased asset, as if it were sold, typically used in capital leasing.