Which of the Following Statements Is FALSE

question 18

Multiple Choice

Which of the following statements is FALSE?

• A)Leasing allows the party best able to bear the risk to hold it.For example,small firms with a low tolerance for risk may prefer to lease rather than purchase assets.
• B)When the lessor is the manufacturer,a lease in which the lessor bears the risk of the residual value can improve incentives and lower agency costs.
• C)For leases in which the lessor retains a substantial interest in the asset's residual value,the lessee has more of an incentive to take proper care of an asset that is leased rather than purchased.
• D)Whether they appear on the balance sheet or not,lease commitments are a liability for the firm.

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Definitions:

Product Groupings

The categorization of products based on similarities in their characteristics, function, or target market.

Sales Goal

A specific, set target for the amount of sales that a company or individual aims to achieve within a certain time frame.

Volt

A unit of electric potential difference or electromotive force in the International System of Units (SI).

Markdowns

A reduction from the original or previous selling price of goods or services, often to clear inventory or boost sales.