Which of the Following Statements Is False

question 15

Multiple Choice

Which of the following statements is false?

• A) Most financial analysts and sophisticated investors consider operating leases (which must be listed in the footnotes of the financial statements) to be additional sources of leverage.
• B) By carefully avoiding the four criteria that define an operating lease for accounting purposes, a firm can avoid listing the long-term lease as a liability.
• C) Because a lease is equivalent to a loan, the firm can increase its actual leverage without increasing the debt-to-equity ratio on its balance sheet.
• D) For most large corporations, the amount of leverage the firm can obtain through a lease is unlikely to exceed the amount of leverage the firm can obtain through a loan.

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Definitions:

Real Science

Disciplines that are based on empirical evidence and the scientific method, aimed at acquiring knowledge through research, observation, and experimentation.

Random Sample

A sample that gives everyone in the population an equal chance of being selected.

Surveyed

The collection of data or opinions from a group of people, usually through questionnaires or interviews, for research purposes.

Research Question

A concise, well-defined statement or query that outlines the problem or area of investigation within a research project.