Which statement is correct about the "guaranteed residual value"?
A)It is not included in the present value of the payment calculation.
B)Lessee assumes the risk of the property falling below the guaranteed amount.
C)Lessor assumes the risk of the property falling below the guaranteed amount.
D)It is a non-lease cost in the lease arrangement.

Question

Quizplus · Accepted Answer

The lessee assumes the risk of the property falling below the guaranteed amount, as they are responsible for making up the difference if the residual value is less than the guaranteed amount.

Which Statement Is Correct About the "Guaranteed Residual Value