A Guaranteed Residual Value at the Inception of a Capital

question 19

Multiple Choice

A guaranteed residual value at the inception of a capital lease should be

• A)excluded from minimum lease payments.
• B)included as part of minimum lease payments at present value.
• C)included as part of minimum lease payments at future value.
• D)included as part of minimum lease payments only to the extent that guaranteed residual value is expected to exceed estimated residual value.The guaranteed residual value is a promise made by the lessee that the lessor can sell the leased asset at the end of the lease for a guaranteed amount.Since this promise is a potential future payment, it must be included in the calculation of the present value of the lessee's future lease payments.

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Definitions:

International Assignment

A work task or role assigned to an employee which involves working in a different country from their home or regular office location.

Codetermination

A practice where workers have a role in company management decisions, typically through participation on corporate boards.

Expatriate Manager

A manager who is working in a country different from their native country, often for a predetermined period.

Multinational Corporations

Companies that operate in multiple countries, often managing production or delivering services in more than one country.