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In comparison with operating leases, finance leases (or capital leases) will have several consequences on financial statements. Which of the following is a direct consequence

In comparison with operating leases, finance leases (or capital leases) will have several consequences on financial statements. Which of the following is a direct consequence of reporting a lease as a finance lease compared with that as an operating lease?

Select one:

a. Expense will be higher

b. Leverage ratio will be higher

c. Expense will be higher in early years of the lease term but lower in later years of the lease term

d. Asset value will be lower

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