An Operating Lease Is Cancelable Because

question 59

Multiple Choice

An operating lease is cancelable because:

• A)the asset is easily broken or damaged.
• B)the lessee typically is uncertain about his use needs for the asset.
• C)the lessor may need the asset for some other purpose.
• D)the lessee is not a good credit risk.

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Definitions:

Normal Goods

Goods for which demand increases as the income of consumers increases, and vice versa, holding all other factors constant.

Laffer Effect

Refers to the economic theory proposing that there is an optimal tax rate that maximizes government revenue without hindering economic growth.

Labor Supply Curve

A graphical representation of the relationship between the quantity of labor supplied and the wage rate in an economy.

Elasticity of Demand

A measure of how much the quantity demanded of a good responds to a change in the price of that good, calculated as the percentage change in quantity demanded divided by the percentage change in price.