The Financing Rate on the Car You Are Leasing Is

question 6

Multiple Choice

The financing rate on the car you are leasing is called the

• A) money factor.
• B) capitalized cost.
• C) residual value.
• D) purchase option.
• E) capitalized cost reduction.

---

Definitions:

Carrying Value

The book value of assets and liabilities on a company's balance sheet, calculated as the original cost minus any depreciation, amortization, or impairment costs.

Equity Accounts

Equity accounts represent the owner's value in a business, reflected through transactions like contributed capital and retained earnings.

Sinking Fund Bonds

Bonds that include a provision requiring the issuer to set aside funds regularly to repay the bond at maturity.

Principal

The primary amount of a loan or investment, excluding interest or profits.