Minnetonka Company Leases an Asset

question 143

Multiple Choice

Minnetonka Company leases an asset. Information regarding the lease: • Fair value of the asset: $400,000.
• Useful life of the asset: 6 years with no salvage value.
• Lease term is 5 years.
• Annual lease payments are $60,000
• Implicit interest rate: 11%.
• Minnetonka can purchase the asset at the end of the lease period for $50,000.
What type of lease is this?

• A) Operating.
• B) Finance.
• C) Short term.
• D) Long term.

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Definitions:

Verbal Aggression

The use of words to cause harm to another person, including insults, threats, or overly critical comments.

Companionate

Describes a type of love characterized by deep affection, commitment, and intimacy, often in contrast to passionate love.

Sternberg

Refers likely to Robert Sternberg, an American psychologist and psychometrician known for his theories on intelligence, creativity, love, and wisdom.

Commitment

A state or quality of being dedicated to a cause, activity, or relationship, often implying a strong sense of loyalty and responsibility.