A Sale and Leaseback Agreement

question 52

Multiple Choice

A sale and leaseback agreement

• A)is usually an operating lease
• B)is rarely used in today's leasing agreements
• C)is a method of providing liquidity for the lessee
• D)frequently is used for machinery financing, but rarely used in real estate

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Definitions:

Profits

The financial gain achieved when the revenues from business operations exceed the expenses, costs, and taxes involved in sustaining the operation.

Opportunity Costs

The value of the best alternative that is foregone when a different option is chosen.

Special Order

A one-time order that is not considered part of the company’s normal ongoing business.

Capacity

The maximum output that a business can produce in a given period with available resources.