Which of the Following Is Not a Typical Characteristic of an Operating

question 7

Multiple Choice

Which of the following is not a typical characteristic of an operating lease?

• A) It can be used for almost any type of asset
• B) It is essentially a rental agreement
• C) It is similar to a leveraged lease
• D) It is cancellable by the lessee at little or no cost

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Definitions:

Marginal Subcontracting Cost

Marginal subcontracting cost refers to the additional expense incurred by a company to subcontract one more unit of production or service, often considered when evaluating outsourcing options.

Layoff Cost

Expenses incurred by an organization due to the termination of employees, including severance pay and benefits continuation.

Hiring And Training Cost

The expenses associated with recruiting, hiring, and training new employees.

Regular Time Cost

The cost associated with labor during normal working hours, excluding overtime or premium pay rates.