If a Lessor Paid $800,000 for an Asset, How Would

question 79

Multiple Choice

If a lessor paid $800,000 for an asset, how would the lessee treat this amount in his financial lease analysis?

• A)Lessor would ignore it, since it is a lessor cost
• B)Lessor would treat it as a cash inflow, since he avoids it by leasing
• C)Lessor would amortize it over the lease life as an expense
• D)Lessor would discount it by his cost of capital

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