When a Lease Contract Does Not Transfer Title to the Lessee,there

question 3

Multiple Choice

When a lease contract does not transfer title to the lessee,there is no bargain purchase option,and the lease term is not at least 75 percent of the estimated useful life of the leased asset.

• A)The lessee must classify the lease as an operating lease.
• B)The amount of unguaranteed salvage value,if any,determines whether the lease is a capital lease or an operating lease.
• C)The interest rate used to determine the present value of the minimum lease payments also determines whether the lease is a capital lease or an operating lease.
• D)The lessee must use the greater of the lessor's rate of return or the lessee's incremental borrowing rate to determine whether the lease is a capital lease or an operating lease.

---

Definitions:

Technology Improvement

Enhancements or advancements in technology that increase productivity, efficiency, and capabilities within industries or society.

Supply Curve

A graphical representation showing the relationship between the price of a good or service and the quantity thereof that producers are willing to supply.

Alternative Good

A product or service that consumers may choose as a substitute for another good or service.

Quantity Supplied

The amount offered for sale per period at a particular price, as reflected by a point on a given supply curve.