Which of the Following Statements Is True of Leasing

question 61

Multiple Choice

Which of the following statements is true of leasing?

• A)It is an arrangement in which a contractor supplies managerial know-how to operate a hotel, hospital, airport, or other facility in exchange for compensation.
• B)The lessor transfers ownership of the property in exchange for a lump-sum payment.
• C)It is a high-risk and high-cost method of entering a foreign market.
• D)A major advantage for the focal firm is the ability to gain quick access to target markets, while putting assets to use in earning profits.

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Definitions:

Utility Function

A mathematical representation of how consumers derive satisfaction or utility from consuming goods and services.

Goods

Tangible products or items that satisfy human wants or needs.

Budget Constraint

An economic model that represents all the combinations of goods and services that a consumer can afford with a fixed amount of income.

Goods

Physical items that are produced and consumed by individuals or businesses to satisfy needs or wants.