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Direct Financing Lease
A leasing arrangement in which the lessor finances the leased asset, and the lessee's payments are structured to cover the asset's costs and provide a return to the lessor.
Implicit Interest Rate
Refers to the interest rate in a financial transaction that is not explicitly stated but rather implied by the terms of the arrangement.
Present Value
The present worth of a future amount of money or a series of cash flows, discounted at a certain rate of return.
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