Which of the Following Is a Difference Between Acquiring an Asset

question 101

Multiple Choice

Which of the following is a difference between acquiring an asset with a capital lease or using debt to purchase the asset?

• A) The lease does not appear as a liability on the balance sheet.
• B) The lessee can depreciate the asset over the length of the lease rather than over its useful life.
• C) The lessee does not retain the salvage value of the asset.
• D) The lessee is not responsible for repairs, maintenance and insurance on the asset.

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Definitions:

Milton Friedman

An American economist and Nobel Prize winner known for his research on consumption analysis, monetary history and theory, and the complexity of stabilization policy.

Economic Thought

A branch of economics that studies the evolution of economic ideas and theories over time.

Keynesians

An economic theory that advocates for active government intervention in the marketplace and monetary policy to manage demand and smooth out cycles of boom and bust.

Monetarists

Economists who believe that variations in the money supply are the main source of economic fluctuations.