Which of the Following Statements Is FALSE

question 4

Multiple Choice

Which of the following statements is FALSE?

• A)Lease payments are a fixed obligation of the firm.
• B)The risk of the lease payments is no greater than the risk of secured debt,so it is reasonable to discount the lease payments at the firm's secured borrowing rate.
• C)If a firm purchases a piece of equipment,the expense is a capital expenditure.Therefore,the purchase price can be depreciated over time,generating a depreciation tax shield.
• D)If the equipment is leased and the lease is a non-tax lease,there is no capital expenditure,but the lease payments are an operating expense.

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Values

Numerical quantities assigned to variables or outcomes in mathematical expressions, calculations, or measurements.

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An algebraic expression that has been reduced to its simplest form, making it easier to interpret or solve.

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A sequence in math that features common numerals, symbols like x or y, and mathematical actions including plus, minus, times, and divided by.

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An expression that has been reduced to its simplest form, combining like terms and applying mathematical operations where possible.