The Lease Term Includes the Fixed Non-Cancelable Term of the Lease

question 66

Multiple Choice

The lease term includes the fixed non-cancelable term of the lease plus

• A) any periods covered by an ordinary renewal options preceding the exercise date of a bargain purchase option
• B) any periods covered by a bargain renewal option
• C) any periods for which failure to renew the lease imposes a significant penalty on the lessee
• D) all of these

---

Definitions:

Total Profit

The net amount of money a business retains after subtracting all its expenses, taxes, and costs from its total revenue.

MC Curve

Marginal Cost Curve, which shows the change in total cost that arises when the quantity produced changes by one unit.

AVC Curve

A graph representing the Average Variable Cost of producing different quantities of output, typically showing how AVC decreases and then increases.

Market Demand

The overall sum of a particular good or service that every customer in a market is eager and able to acquire at a range of prices.