Use the Following Statements to Answer This Question

question 40

Multiple Choice

Use the following statements to answer this question:

• A) I and II are correct.
• B) I and II are incorrect.
• C) I is correct and II is incorrect.
• D) I is incorrect and II is correct.
• I.Leverage leasing does not provide the same benefits to the lessor in Canada as it does in the U.S.
• II.Amortizing the asset on the lessor's balance sheet is a major benefit for financial lease revenue.

---

Definitions:

Depreciation Expense

A technique in accounting for distributing the expense of a physical asset across its usable life.

Fixed Costs

Expenses that do not change with the level of activity or output over a short period, such as rent, salaries, and insurance premiums.

Operating Leverage

A measure that evaluates the extent to which a firm can increase its profits by increasing sales, highlighting the fixed versus variable costs in operations.

Financial Break-Even

The point at which total revenues and total expenses are equal, resulting in neither profit nor loss.