If a Lessor Paid $800,000 for an Asset, How Would

question 91

Multiple Choice

If a lessor paid $800,000 for an asset, how would the lessee treat this amount in his financial lease analysis?

• A)lessor would ignore it, since it is a lessor cost.
• B)lessor would treat it as a cash inflow, since he avoids it by leasing.
• C)lessor would amortize it over the lease life as an expense.
• D)lessor would discount it by his cost of capital.

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Definitions:

Direction

Guidance or supervision of action or conduct, e.g., the course along which someone or something moves.

Content

The information or subject matter contained in a document, speech, publication, or work of art.

Perceived/Felt Stage

This term is unclear and does not appear to refer to a widely recognized concept in psychology or management.

Vacation Time

Periods of time when an individual is not required to be at work or school, often used for rest, travel, or recreation.