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:

Preincorporation Subscription

An agreement by an investor to purchase stock in a corporation, made before the corporation is legally formed.

Post Incorporation Subscription

Agreements to purchase stock in a company made after the company has been incorporated.

Corporate Promoters

Individuals or companies that take the initiative in founding and organizing the business of a corporation, including arranging its incorporation and securing capital.

Organization Meeting

The initial meeting where the structure of a new organization is decided, officers are elected, and bylaws are adopted.