If an Equivalent Loan Has the Same Cash Flows as a Lease

question 43

Multiple Choice

If an equivalent loan has the same cash flows as a lease, and results in a $1,500 higher present value, one could conclude that: present value than the lease analysis indicated, this shows:

• A)That leasing is preferable to buying the asset, since owning costs $1,500 more
• B)That either is acceptable, since the cash flows are the same
• C)One should not lease
• D)That owning will require more capital up front

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Definitions:

Advantageous Situations

Scenarios that present favorable conditions or opportunities likely to benefit an individual or group.

Behavioural Style

Behavioural style pertains to an individual's consistent patterns of actions and reactions, showcasing their preferred way of behaving, responding, and communicating in various situations.

Successful Minority

Describes a subgroup within a larger population that achieves a higher level of success compared to the average, often despite facing systemic barriers.

Principled

Acting in accordance with morality and showing recognition of right and wrong.