Which of the Following Would Not Be a Characteristic of a Financial

question 6

Multiple Choice

Which of the following would not be a characteristic of a financial lease?

• A) They are usually fully amortized.
• B) They usually require the lessor to maintain and insure the leased assets.
• C) They usually do not include a cancellation option.
• D) The lessee usually has the right to renew the lease at expiration.

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Definitions:

Present Value

Today's value of a sum of money or sequence of cash inflows expected in the future, discounted by a certain rate of return.

Desired Rate

The target interest or return rate set by an individual or organization for investments or loans.

Internal Rate Of Return

A financial metric used to evaluate the profitability of an investment, representing the discount rate that makes the net present value of all cash flows from the investment zero.

Present Value

The value now of a future monetary sum or cash flows, considering a specified rate of return.