A lessee wants to lease an asset on a long-term noncancelable basis, but wants to avoid capitalizing the lease. The lessee is considering the following strategies to accomplish its objective: 1 . Use a lessee guarantee of residual value. 2 . Make it impossible for the lessee (which has a very low borrowing rate) to determine the lessor's implicit rate, which is much higher the lessee's borrowing
rate. 3 . Include a bargain purchase option in the lease agreement. 4 . Include a transfer of title in the lease agreement. Which of the strategies above will provide the desired result?
a. only 2
b. 1 and 3
c. 1 and 4
d. None
D
You might also like to view...
The minimarket test method is limited to ads for frequently purchased consumer goods with sales objectives
Indicate whether the statement is true or false
Why is it problematic for retailers to spend about the same on communication programs for each geographic region?
What will be an ideal response?
The payback period is the
a. length of time over which the investment will provide cash inflows. b. length of time over which the initial investment is recovered. c. shortest length of time over which an investment may be depreciated. d. shortest length of time over which the net present value will be positive.
Between 1880 and 1930, injunctions were commonly used for all of the following except to stop, limit, or prohibit:
A. Picketing during strikes. B. The use of yellow dog contracts. C. Employees from striking. D. Employees from unionizing.