Which of the Following Statements Is False

question 1

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 a 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:

Cognitive Processes

The mental operations involved in perception, memory, thought, and problem-solving that are crucial for acquiring knowledge and understanding.

Tonic Responses

Continuous or sustained physiological responses to a stimulus, as opposed to phasic or short-term reactions.

Phasic Responses

Transient or temporary reactions of organisms to stimuli, distinguishing from sustained or tonic responses.

Adolescents

Individuals in the developmental stage ranging roughly from 10 to 19 years old, characterized by rapid physical, emotional, and intellectual changes.