Which of the Following Is Not an Advantage of a Lease

question 23

Multiple Choice

Which of the following is not an advantage of a lease financing arrangement?

• A) Companies with losses can still depreciate equipment if leased from a finance company.
• B) Repossession is easier in a lease-finance arrangement because the finance company already owns the equipment.
• C) Finance companies are in a good position to sell a repossessed asset, especially if they are a subsidiary of the equipment manufacturer.
• D) The lessee often does not have to make as large of an upfront payment, relative to a straight loan.

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Definitions:

Income Tax

A tax levied by governments on individuals or entities based on their income or profits.

Rebated Money

Funds that are returned to a payer, often as a discount or refund, after a purchase or payment has been made.

Taxpayer Reasoning

The thought process individuals use to evaluate the benefits and costs of paying taxes relative to the services and goods provided by the government.

Income Effect

The alteration in consumption habits of a person or the economy caused by a variation in real income.