All of the Following Would Qualify as a Capital Lease

question 145

Multiple Choice

All of the following would qualify as a capital lease except:

• A)The lease term is 80% of the asset's estimated useful life.
• B)The lease agreement contains a bargain purchase option.
• C)The present value of the lease payments equals 70% of the fair value of the leased asset.
• D)Title to the leased asset transfers to the lessee at the end of the lease term.
• E)The lease term equals 90% of the asset's estimated useful life.

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Definitions:

Optimum Sustained Yield

The maximum level at which a natural resource can be routinely used without long-term depletion.

Maximum Sustained Yield

The largest quantity of a natural resource, such as fish or timber, that can be harvested sustainably over an indefinite period without causing a population decline.

Prairie Pothole Region

A geographic area in North America characterized by thousands of shallow wetlands, vital for waterfowl nesting.

Southern Ontario

A region in Canada, characterized by its economic activity, agricultural lands, and being home to a significant portion of Canada’s population.