Item 19

Even with lease capitalization, the financial positions of lessors and lessees differ. Which of the following statements does not support that assertion?

Multiple Choice

• the asset choice is influenced by the method of financing.

• secured creditors are more exposed to risk in the lease than are lessees.

• in the face of default, the lessor's exposure to loss is larger than the lessee's.

• the lessor stands to profit from unexpectedly high salvage proceeds, while the lessee does not.