Which of the Following Statements Best Describes Sale and Lease-Back

question 46

Multiple Choice

Which of the following statements best describes sale and lease-back agreements?

• A)The lessee relinquishes the title to the property in return for cash and agrees to make periodic lease payments.
• B)The lessor relinquishes the title to the property and the lessee agrees to make periodic lease payments.
• C)The lessee obtains effective control of the asset.
• D)They normally involve leasing such assets as computers and motor vehicles.

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Definitions:

Put Option

A financial derivative that gives the holder the right, but not the obligation, to sell a specified amount of an underlying asset at a set price within a specified time frame.

British Pounds

The currency of the United Kingdom, used as a medium of exchange within the country and sometimes beyond.

Put Option

A financial contract that gives the holder the right, but not the obligation, to sell a specified amount of an underlying asset at a set price within a specific period.