Assume That Souse Agrees to Lease a New Machine from LAIRD

question 3

Multiple Choice

Assume that Souse agrees to lease a new machine from LAIRD on January 1,2017,for $40,000 per year,paid in advance (i.e. ,at the beginning of the year) .Executory costs are $1,000.The lease term is 11 years and the asset's useful life is 10 years.There is no bargain purchase option.The guaranteed residual value is $10,000.Which statement is correct?

• A)The executor costs will be included in the minimum lease payments.
• B)The guaranteed residual will be excluded in the minimum lease payments.
• C)This is an operating lease because there is no bargain purchase option.
• D)This is a finance lease since the lease term is for most of the economic life of the asset.

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Definitions:

Visual Cortex

is the part of the cerebral cortex responsible for processing visual information, located in the occipital lobe of the brain.

Occipital Lobe

The rearmost lobe in the brain, responsible for processing visual information from the eyes.

Cortical Regions

Areas of the brain's cerebral cortex involved in various higher-level functions including sensation, perception, memory, and voluntary physical action.

Frontal Lobe

The frontal lobe is a part of the brain located at the front of the cerebral cortex, involved in decision making, problem solving, control of purposeful behaviors, consciousness, and emotions.