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Capital Lease
A capital lease is a lease agreement that transfers substantially all the risks and benefits of ownership from the lessor to the lessee.
Bargain Purchase Option
A provision in a lease agreement that allows the lessee to purchase the leased asset at a price significantly below its fair market value.
Economic Life
The estimated period over which an asset is expected to be useful in generating revenue or its intended purpose.
Carrying Value
The recorded value of an asset in a company's financial statements, taking into account depreciation, amortization, and impairment costs.
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