Heavy Equipment Rentals Borrows Money on a Nonrecourse Basis from the Financial

question 23

Multiple Choice

Heavy Equipment Rentals borrows money on a nonrecourse basis from The Financial Group to fund its purchases of construction equipment such as backhoes,graders,earth movers,etc.This equipment is then leased to contractors.The leases are classified as tax-oriented leases.Which one of the following terms best describes these lease of construction equipment?

• A)leveraged lease
• B)sale and leaseback arrangement
• C)operating lease
• D)perpetual lease
• E)straight lease

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Definitions:

Unidirectional Grooves

Grooves in a tire designed to optimize water evacuation and improve grip by pointing in a single direction, enhancing performance in wet conditions.

Axle Wheel Ends

The outer sections of a vehicle's axle where the wheels are mounted, including the hub, bearings, and related components.

Steer Axle

An axle that is equipped with wheels and tires and is responsible for steering the vehicle. It's typically located at the front of the vehicle.

Tire Life

The expected or actual duration of serviceability of a tire before it needs to be replaced due to wear, damage, or age.