Which of the Following Statements Is False

question 6

Multiple Choice

Which of the following statements is false?

• A) Lease payments are a fixed obligation of the firm.
• B) The risk of the lease payments is no greater than the risk of secured debt, so it is reasonable to discount the lease payments at the firm's secured borrowing rate.
• C) If a firm purchases a piece of equipment, the expense is a capital expenditure. Therefore, the purchase price can be depreciated over time, generating a depreciation tax shield.
• D) If the equipment is leased and the lease is a non-tax lease, there is no capital expenditure, but the lease payments are an operating expense.

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Definitions:

Different Reward Programs

Various schemes or plans designed to motivate and compensate employees or participants, often including financial incentives, benefits, or non-material recognitions.

Goal Difficulty

The extent to which a goal is challenging and requires effort to achieve, often impacting motivation levels.

Goal Clarity

The extent to which the objectives to be achieved are clearly defined and understood.

Performance Management Systems

Frameworks used by organizations to monitor, review, and manage the performance of employees and ensure the achievement of strategic objectives.