A Lessor Finds a Lease Attractive from a Tax Viewpoint

question 52

Multiple Choice

A lessor finds a lease attractive from a tax viewpoint because he:

• A)Need not pay taxes on his assets so long as they are leased out
• B)Gets a tax deduction from his lease payment
• C)Can use the lease payment to lower his taxable income
• D)Can use the capital cost allowance tax shield from ownership

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Definitions:

Consumer Sovereignty

The idea that what consumers want influences the goods and services produced in an economy.

Conform To Consumer Demands

Adjusting product offerings, services, or business practices to meet the expectations and preferences of consumers.

Economically Efficient

A state where resources are allocated in a way that maximizes the net benefit to society, with no waste.

Total Costs

Represents the complete expenditures incurred by a firm or an individual in the production or purchase of goods and services.