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:

Payee

The individual or entity to whom a payment is to be made or who will receive the payment.

Subsequent Holder

An individual or entity that acquires a negotiable instrument after it has been initially issued.

Simple Contracts

Contracts that can be oral or written, not formalized by seal, and recognized by courts if they meet basic requirements like offer, acceptance, and consideration.

Negotiable Instruments

Written documents guaranteeing the payment of a specific amount of money, either on demand or at a set time, with the payer usually not named.