Which of the Following Statements Is FALSE

question 19

Multiple Choice

Which of the following statements is FALSE?

• A)Most financial analysts and sophisticated investors consider operating leases (which must be listed in the footnotes of the financial statements)to be additional sources of leverage.
• B)By carefully avoiding the four criteria that define an operating lease for accounting purposes,a firm can avoid listing the long-term lease as a liability.
• C)Because a lease is equivalent to a loan,the firm can increase its actual leverage without increasing the debt-to-equity ratio on its balance sheet.
• D)For most large corporations,the amount of leverage the firm can obtain through a lease is unlikely to exceed the amount of leverage the firm can obtain through a loan.

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Definitions:

Erection

The physiological response resulting in the increased blood flow to the penis, leading to its enlargement and firmness.

Specific Object

A distinct item or entity that is identifiable and can be distinguished from other objects.

Curiosity

An intense eagerness to acquire knowledge or information.

Exploration

The act of searching, investigating, or traveling through new areas to learn about them.