If the Present Value of the Lease Payments Is 90

question 72

Multiple Choice

If the present value of the lease payments is 90% or more of the market value of the leased asset, the:

• A) lease is not cost-effective and should be cancelled.
• B) lease may be classified as an operating lease.
• C) one of the criteria is met for the lease to be considered a capital lease.
• D) lease may be recorded off-balance sheet.

---

Definitions:

Eyewitness

A person who directly observes an event and can provide testimony or information about it.

Biased

A tendency to favor or lean towards a particular perspective, conclusion, or response, often in a way that is considered to be unfair or biased against other options.

Tapped

Accessing a resource or obtaining information from a specific source; also refers to gently striking something.

Emotion

A complex psychological state involving an individual's subjective experience, physiological response, and behavioral or expressive response.