Which of the Following Statements Is False

question 56

Multiple Choice

Which of the following statements is false?

• A) Absent market imperfections, leases represent another form of zero-NPV financing available to a firm, and the Modigliani-Miller propositions apply: leases neither increase nor decrease firm value, but serve only to divide the firm's cash flows and risks in different ways.
• B) In a perfect market, the cost of leasing is equivalent to the cost of purchasing and reselling the asset.
• C) Each lease agreement can be tailored to fit the precise nature of the asset and the needs of the parties at hand.
• D) Features of leases will be priced as part of the lease payment. Terms that give valuable options to the lessee lower the amount of the lease payments, whereas terms that restrict these options will raise them.

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Definitions:

Apartheid

The system of segregation of racial and ethnic groups that was legal in South Africa between 1948 and 1991.

White Collar

A description characterizing lower-level professional and management workers and some highly skilled laborers in technical jobs.

Lower-management

The level of management directly supervising frontline employees, responsible for day-to-day operational decisions and implementing higher management policies.

Socioeconomic Status

An individual's or family's economic and social position in relation to others, based on income, education, and occupation.