If the asset in Question 64 were exactly equal to its undepreciated capital cost instead of zero, what effect would this change have on the financial lease analysis?
A)The salvage would become a benefit of leasing
B)The change would have no effect on the lease analysis
C)The terminal loss would disappear and that would be the only change
D)The terminal loss would disappear and the salvage is now a leasing cost

Question

Quizplus · Accepted Answer

If the asset were equal to its undepreciated capital cost, the terminal loss would disappear. However, the salvage would now be considered a leasing cost instead of a benefit. Therefore, the correct choice is D, "The terminal loss would disappear and the salvage is now a leasing cost."

If the Asset in Question 64 Were Exactly Equal to Its