Which of the Following Statements Is False

question 20

Multiple Choice

Which of the following statements is false?

• A) Leasing allows the party best able to bear the risk to hold it. For example, small firms with a low tolerance for risk may prefer to lease rather than purchase assets.
• B) When the lessor is the manufacturer, a lease in which the lessor bears the risk of the residual value can improve incentives and lower agency costs.
• C) For leases in which the lessor retains a substantial interest in the asset's residual value, the lessee has more of an incentive to take proper care of an asset that is leased rather than purchased.
• D) Whether they appear on the balance sheet or not, lease commitments are a liability for the firm.

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Definitions:

Genetically Engineered

The deliberate modification of the characteristics of an organism by manipulating its genetic material.

Government Funding

Financial resources provided by the government to support organizations, programs, or projects benefiting the public.

Biochemist

A scientist specializing in the chemical processes and substances that occur within living organisms.

Attitude Change

Any significant modification of an individual’s attitude. In the persuasion process, this involves the communicator, the communication, the medium used, and the characteristics of the audience. Attitude change can also occur by inducing someone to perform an act that runs counter to an existing attitude.