Ranchers Can Raise Either Cattle or Sheep on Their Land

question 218

Multiple Choice

Ranchers can raise either cattle or sheep on their land.Which of the following would cause the supply of sheep to increase?

• A)an increase in the price of sheep
• B)a decrease in the price of cattle
• C)an increase in the demand for cattle
• D)an increase in the price of sheep feed

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Definitions:

Bargain Purchase Option

An option in a lease agreement that allows the lessee to purchase the leased asset at the end of the lease term at a price significantly below its expected fair market value.

Executory Costs

Executory costs are expenses associated with fulfilling the terms of a contract, typically not included in the initial acquisition cost of an asset.

Guaranteed Residual Value

The minimum future value of an asset as guaranteed by a third party or agreement upon the asset's lease end.

Initial Direct Costs

Initial Direct Costs are expenses directly associated with negotiating and arranging a lease that are not included in the net investment in the lease.