If a Financial Lease Analysis Shows a NPV of $1,750

question 77

Multiple Choice

If a financial lease analysis shows a NPV of $1,750 that means:

• A)It will cost the lessee $1,750 more to lease
• B)It will cost the lessee $1,750 more to own
• C)The lessee will have to put down $1,750 as a lease deposit
• D)The lessor should raise his annual lease payments by $1,750

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Definitions:

Debt Ratio

A financial ratio that measures the extent of a company's leverage, calculated by dividing its total liabilities by its total assets.

Land and Building

Real estate assets, including both the ground itself and any structures on it, considered key components of property investment and valuation.

Machinery

Equipment with moving mechanical parts used in industrial or manufacturing processes to facilitate production.

Cash in Hand

Refers to the amount of currency and negotiable instruments that are immediately available for business transactions or expenses, not deposited in a bank or invested.