One of the Four General Criteria for a Capital Lease

question 56

Multiple Choice

One of the four general criteria for a capital lease is that the present value at the beginning of the lease term of the minimum lease payments equals or exceeds

• A) the property's fair market value.
• B) 90 percent of the property's fair market value.
• C) 75 percent of the property's fair market value.
• D) 50 percent of the property's fair market value.

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Definitions:

Capacity

The maximum amount that something can contain or produce, or the ability to perform, understand, or withstand something.

Overestimated

To assess or judge something to be greater, larger, or more important than it actually is.

Plus or Minus

Often used to indicate the precision of an estimate, measurement, or mathematical result, representing a range of possible values.

Sensory

Relating to or involving the senses or sensation, including sight, sound, taste, touch, and smell.