Which of the Following Best Explains Why an Organization Would

question 53

Multiple Choice

Which of the following best explains why an organization would enter into a capital lease contract?

• A) To increase the ability to borrow additional funds from creditors.
• B) To reduce the organization's free cash flow from operations.
• C) To improve the organization's free cash flow from operations.
• D) To acquire the asset at the end of the lease period at a price lower than the fair market value.

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