The Financing Rate on a Lease Similar to the Interest

question 63

Multiple Choice

The financing rate on a lease similar to the interest rate on a loan is called the _____.

• A)lease point
• B)residual rate
• C)money factor
• D)purchase option
• E)capitalized cost

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Definitions:

Tax Rate

The extent to which the government extracts a percentage of income as taxes from businesses or people.

Market Value

The current exchange rate for acquiring or disposing of a service or asset.

Bond Issue

A financial instrument issued by a corporation or government as a way of borrowing money, where the issuer promises to pay back the face value on a specific date, along with periodic interest payments.

Weighted Average Cost of Capital (WACC)

A calculation of a firm's cost of capital, weighted by the proportion of each component of capital, including debt and equity.