Which of the Following Statements Is False

question 9

Multiple Choice

Which of the following statements is false?

• A) If a firm only needs to use the asset for a short time, it is probably less costly to lease it than to buy and resell the asset.
• B) While owners of assets are likely to resell them only if the assets are "lemons," a short-term lease can commit the user of an asset to return it regardless of its quality. In this way leases can help mitigate the adverse selection problem in the used goods market.
• C) Car dealerships are in a better position to sell a used car at the end of a lease than a consumer is.
• D) If the asset's tax depreciation deductions are faster than its lease payments, there are tax gains from a true tax lease if the lessor is in a lower tax bracket than the lessee.

---

Definitions:

Dissonance Theory

A psychological theory suggesting that inconsistency among beliefs, attitudes, or behaviors causes discomfort, leading individuals to change them to reduce the discomfort.

Psychological Inconsistency

A state where an individual's thoughts, feelings, and behaviors do not align, leading to internal conflict.

Theory Development

The process of creating and refining concepts and propositions to explain phenomena in a systematic way.

Deduction

is a logical process wherein specific conclusions are drawn from general principles or premises.