If a lease is not capitalized,
1) the return on assets is overstated
2) the return on assets is understated
3) the use of financial leverage is overstated
4) the use of financial leverage is understated
A) 1 and 3
B) 1 and 4
C) 2 and 3
D) 2 and 4
Correct Answer:
Verified
Q21: A firm may choose to lease if
A)
Q22: If a term loan requires equal annual
Q23: What is the repayment schedule for the
Q24: Capitalizing a lease
A) reduces income
B) reduces equity
C)
Q25: A firm could buy an asset for
Q27: A financial lease is similar to an
Q28: A firm could buy an asset for
Q29: A firm could lease the equipment in
Q30: If a term loan requires equal annual
Q31: Features of a term loan include
1) restrictive
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