A Lease with High Payments Early in Its Life Which

question 25

Multiple Choice

A lease with high payments early in its life which then decline to termination would:

• A) provide greater cash flow to the lessee in the beginning years.
• B) be evidence of tax avoidance and not acceptable to the CRA.
• C) be qualified as a capital lease under CICA 3065.
• D) provide a lower residual value and thus ensure a bargain-purchase price option.

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Definitions:

Continuity Theory

A psychological theory suggesting that individuals tend to maintain the same activities, behaviors, personalities, and relationships as they age.

Connected

Being joined or linked in some manner, either physically, emotionally, or digitally, implying a state of unity or association.

Past

The past refers to the period of time that has already occurred, in contrast to the present and the future.

Activity Theory

A theory that suggests aging adults remain more satisfied when they are engaged in activities that maintain their social interactions and personal development.