Which of the Following Statements Is False

question 41

Multiple Choice

Which of the following statements is false?

• A) In a direct lease, the lessor is the manufacturer (or a primary dealer) of the asset.
• B) The lease specifies any cancellation provisions, the options for renewal and purchase, and the obligations for maintenance and related servicing costs.
• C) If a firm already owns an asset it would prefer to lease, it can arrange a sale and leaseback transaction.
• D) With many leases, the lessor provides the initial capital necessary to purchase the asset, and then receives and retains the lease payments.

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Definitions:

Oligopoly

A market structure dominated by a small number of large firms, leading to strategic interactions in setting prices and output.

Coca Cola

A carbonated soft drink brand known for its distinctive flavor, originally intended as a patent medicine.

Tacit Collusion

Cooperation among producers, without a formal agreement, to limit production and raise prices so as to raise one another’s profits.

Competing Producers

Entities or companies that are in the same market striving to gain market share by offering better products, price, or services.