Which of the Following Are Characteristics of Financial or Capital

question 36

Multiple Choice

Which of the following are characteristics of financial or capital leases?

• A) I and II
• B) II and III
• C) I and III
• D) I, II and III
• I.The lease term is equal to 75 percent or more of the economic life of the leased property.
• II.The present value of the minimum lease payments is equal to 70 percent or more of the fair value of the leased property at the inception of the lease.
• III.Provisions are made such that ownership of the leased property is transferred to the lessee at the end of the lease term.

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Definitions:

Taxable Income

The amount of income that is subject to taxation by government authorities, after all deductions and exemptions have been applied.

Condo's Value

The market worth of a condominium unit, determined by factors such as location, amenities, condition, and market trends.

Net Worth

The total value of all assets owned by a person or entity minus any liabilities owed.

Assets

Resources owned by an individual or business that have economic value or are expected to provide future benefit.