If a Leased Asset Has Maintenance Offered as an Included

question 57

Multiple Choice

If a leased asset has maintenance offered as an included extra, such an extra would be evaluated differently from other leasing cash flows in this way.

• A)maintenance would be estimated over shorter time intervals than the lease.
• B)maintenance would represent an extra cost to the lessee.
• C)maintenance would be discounted at a higher discount rate to reflect risk, and represent a cash inflow for lessee.
• D)maintenance would all be paid up front.

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Definitions:

Joint Decisions

Decisions made collectively by two or more parties after considering all perspectives and reaching a consensus.

BATNA

Best Alternative To a Negotiated Agreement; the best course of action a party can take if negotiations fail and an agreement cannot be reached.

Negotiated Agreement

A mutual arrangement or contract reached through discussion and compromise between parties.

Non-Rational Escalation

The phenomenon of continuing a course of action even when it is not in one's best interest, disregarding rational analysis.