Which of the Following Lease Conditions Would Result in a Finance

question 37

Multiple Choice

Which of the following lease conditions would result in a finance lease to the lessee?

• A) The lessee will return the property to the lessor at the end of the lease term.
• B) The lessee can purchase the property for $1 at the end of the lease term.
• C) The fair market value of the property at the inception of the lease is $20,000; the present value of the lease payments is $17,600.
• D) The lease term is 70% of the property's economic life.

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