Which of the Following Statements Is FALSE

question 4

Multiple Choice

Which of the following statements is FALSE?

• A)Lease payments are a fixed obligation of the firm.
• B)The risk of the lease payments is no greater than the risk of secured debt,so it is reasonable to discount the lease payments at the firm's secured borrowing rate.
• C)If a firm purchases a piece of equipment,the expense is a capital expenditure.Therefore,the purchase price can be depreciated over time,generating a depreciation tax shield.
• D)If the equipment is leased and the lease is a non-tax lease,there is no capital expenditure,but the lease payments are an operating expense.

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Definitions:

Myers-Briggs Type Indicator

A personality inventory based on Carl Jung's theories, categorizing individuals into 16 personality types based on preferences in how they perceive the world and make decisions.

Personality Type

A classification of individuals based on their characteristic patterns of thinking, feeling, and behaving.

Preference

An individual's choice or inclination toward a particular option or thing over another.

Adjustment

The process of adapting or becoming accustomed to new conditions, situations, or environments.