If a Lessor Borrows Money on a Nonrecourse Basis to Purchase

question 4

Multiple Choice

If a lessor borrows money on a nonrecourse basis to purchase an asset that will be leased to another party,then:

• A)the lessor is responsible for the payments on the borrowed funds whether or not the lessee pays the lease payments.
• B)the lessee must pay both the lease payment and the loan payment.
• C)the loan is considered paid in full if the lessee discontinues making the lease payments or terminates the lease early.
• D)the lessor is only obligated to make loan payments as long as the lessor is collecting the lease payments.
• E)the lessor must pursue the lessee if the lessee fails to make the agreed upon lease payments.

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Definitions:

Macy's

An American department store chain known for its wide range of consumer goods, including clothing, accessories, and home furnishings.

Target Customers

Individuals or groups identified as the primary audience for a business's products or services, often characterized by specific needs and preferences.

Manufacturers

Entities involved in the process of producing goods from raw materials through various means, such as machinery, labor, and assembly processes.

Retailers

Businesses that sell goods directly to consumers through various channels, including stores, online platforms, and through mail.