Financial Leasing Is Only Justified by One of the Following

question 69

Multiple Choice

Financial leasing is only justified by one of the following arguments.

• A)The lessor can make better use of CCA tax shields than can a lessee
• B)Leasing allows financial officers to more easily hide capital expenditures
• C)Leasing allows one to get access to an asset with no money down
• D)Such leases need not appear on the balance sheet as capitalized items

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Definitions:

Relative

A person connected to another or others by blood or marriage, or a concept that is considered in relation or proportion to something else.

Cost-benefit Analysis

A systematic approach to estimate the strengths and weaknesses of alternatives in terms of their costs and benefits, often used in decision making and project evaluations.

Economic Efficiency

The optimal allocation of resources to maximize the production of goods and services.

Marginal Happiness

The additional satisfaction or utility that a person gains from receiving or consuming one more unit of a good or service.