A Lease Is Classified as a Capital Lease If the Minimum

question 235

True/False

A lease is classified as a capital lease if the minimum lease payments is at least 75% of the fair market value of the property at the inception of the lease.

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Definitions:

Inputs

Resources such as labor, materials, and capital that are used in the production process to produce goods and services.

Output

The total amount of goods or services produced by a company or country.

Economies of Scale

Cost advantages that enterprises obtain due to their scale of operation, typically characterized by a reduction in average costs with increased production.

Minimum Efficient Scale

The smallest scale of production a firm can achieve while still taking full advantage of economies of scale in terms of costs per unit.