Operating Leases Are More Complicated to Value Than Financial Leases

question 3

Multiple Choice

Operating leases are more complicated to value than financial leases because _____.

• A)the lessee cannot return the asset except with substantial penalties
• B)it is difficult to find the appropriate discount rate
• C)of the uncertainty about the length of the lease
• D)it is difficult to predict the cash flows.

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Definitions:

Positive Attitude

A mental disposition that reflects expectations of favorable outcomes or highlights positive aspects of a situation.

Level of Commitment

the extent to which an individual is dedicated to a course of action or organization.

Internalization

The absorption of knowledge, ideas, norms, and behaviors into one's own cognitive structure, often making them an aspect of one's personality.

Socialization

The process through which individuals acquire the values, beliefs, and behaviors considered appropriate by their society or social group.