If the Lease Payments of the $800,000 Asset Described in Question

question 78

Multiple Choice

If the lease payments of the $800,000 asset described in Question 57 were $210,000, first payment occurring at the beginning of the first year when the lease is signed, how would the lessee treat these payments in his financial lease analysis? His tax rate is 40%.

• A)Lessee would treat each $210,000 payment as a cash outflow
• B)Lessee would deduct these $210,000 payments from his CCA
• C)Lessee would record net cash outflows for five years of $126,000 for leasing
• D)Lessee would amortize the $800,000 over five years and show these inflows

---

Definitions:

Keystone Species

A species whose presence and role within an ecosystem have a disproportionate effect on other organisms within the system.

Indicator Species

Species that serve as a measure of the environmental conditions of a habitat or ecosystem, often used to assess changes in environmental health.

Grasses

Members of the Poaceae family, a large and nearly ubiquitous family of monocotyledonous flowering plants.