Try out our new practice tests completely free!

# Corporate Finance

Bookmark

## Quiz 25 : Leasing

Which of the following statements regarding operating leases is FALSE?
Free
Multiple Choice

A

A lease where the lessee can purchase the asset at the minimum of its fair market value and a fixed price is called a:
Free
Multiple Choice

D

A lease will be treated as a non-tax lease if it satisfies any of the following conditions,EXCEPT:
Free
Multiple Choice

A

Which of the following statements is FALSE?
Multiple Choice
Which of the following statements is FALSE?
Multiple Choice
The lease is treated as a capital lease (financial lease)for the lessee and must be listed on the firm's balance sheet if it satisfies any of the following conditions,EXCEPT:
Multiple Choice
Which of the following statements is FALSE?
Multiple Choice
Use the information for the question(s)below. Suppose the purchase price of a bulldozer is $90,000,its residual value in four years is certain to be$15,000,and there is no risk that the lessee will default on the lease.Assume that capital markets are perfect and the risk-free interest rate is 6% APR with monthly compounding. -Calculate the monthly lease payments for a four-year fixed price lease that allows the lessee to buy the bulldozer at the end of the lease for $8000. Essay Answer: Use the information for the question(s)below. Suppose the purchase price of a bulldozer is$90,000,its residual value in four years is certain to be $15,000,and there is no risk that the lessee will default on the lease.Assume that capital markets are perfect and the risk-free interest rate is 6% APR with monthly compounding. -The monthly lease payments for a four-year lease of the bulldozer are closest to: Multiple Choice Answer: Use the information for the question(s)below. Suppose the purchase price of a bulldozer is$90,000,its residual value in four years is certain to be $15,000,and there is no risk that the lessee will default on the lease.Assume that capital markets are perfect and the risk-free interest rate is 6% APR with monthly compounding. -Calculate the monthly lease payments for a four-year$1.00 out lease of the bulldozer.
Essay
Which of the following statements regarding capital leases is FALSE?
Multiple Choice
A lease that gives the lessee the option to purchase the asset at its fair market value at the termination of the lease is called a:
Multiple Choice
Use the information for the question(s)below. Suppose the purchase price of a bulldozer is $90,000,its residual value in four years is certain to be$15,000,and there is no risk that the lessee will default on the lease.Assume that capital markets are perfect and the risk-free interest rate is 6% APR with monthly compounding. -Suppose that instead of leasing the bulldozer,the company is considering purchasing a bulldozer outright by borrowing the purchase price using a four-year annuity loan.The monthly loan payments for a four-year loan to purchase the bulldozer are closest to:
Multiple Choice
A lease where ownership of the asset transfers to the lessee at the end of the lease for a nominal cost is called a:
Multiple Choice
Which of the following statements regarding leases is FALSE?
Multiple Choice
Which of the following statements is FALSE?
Multiple Choice