An Operating Budget Is Similar to a Capital Budget in That

question 13

True/False

An operating budget is similar to a capital budget in that both are long-term budgets.

---

Definitions:

Leveraged Lease

A financing agreement where a lessor borrows funds to purchase an asset, which is then leased to a lessee, with the lease payments ensuring repayment of the loan.

Single Investor Lease

A lease agreement in which a single investor owns the asset and leases it directly to a company, who then has the option to buy the asset at the end of the lease term.

Conditional Sales Agreement Lease

A lease agreement where the lessee has the option to purchase the leased asset at the end of the lease term under agreed-upon conditions.

Financial Leases

Long-term leases that effectively transfer the risks and rewards of ownership from the lessor to the lessee, almost like a loan arrangement.