For Many New Businesses, the Most Important Reason to Lease

question 77

Multiple Choice

For many new businesses, the most important reason to lease rather than buy a facility is:

• A)avoidance of a large cash outlay.
• B)freedom in modifying the building.
• C)avoidance of interest payments.
• D)avoidance of liability lawsuits.

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Definitions:

Capital Budgeting

The process of evaluating and selecting long-term investments that are in line with the goal of maximization of shareholder wealth.

Income Tax Expense

The cost incurred by businesses and individuals due to earnings, computed based on tax rates and laws.

Capital Budgeting

The process of evaluating and selecting long-term investments that are in line with the goal of wealth maximization.

Straight-Line Depreciation

Straight-line depreciation is a method of allocating the cost of a tangible asset over its useful life in equal annual amounts.