What Happens If Lease Payments Are Reduced

question 63

Multiple Choice

What happens if lease payments are reduced?

• A) Times interest earned goes up.
• B) Fixed charge coverage goes up.
• C) Fixed charge coverage stays the same.
• D) Fixed charge coverage goes down.

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Definitions:

Mineral Deposits

Concentrations of minerals within the Earth's crust that can be extracted and processed into valuable materials.

Betterments

Improvements made to an asset that increase its value or extend its useful life, typically treated as capital expenditures.

Capital Expenditure

Funds used by a company to acquire or upgrade physical assets such as property, industrial buildings, or equipment to improve long-term business operations.

Gain or Loss

The financial result from a transaction where the sale price is either higher (gain) or lower (loss) than the purchase price or the book value of an asset.