MCQS

The contract period of an operating lease tends to ____. a. be equal to the economic life of the asset b. be somewhat greater than the economic life of the asset c. recover the full cost of the asset d. be somewhat less than the economic life of an asset 0.5 points

QUESTION 5 In a leveraged lease, how much of the assets full purchase price does the lessor supply? a. 80100% b. 010% c. 2040% d. 5070% 0.5 points

QUESTION 6 Unilog is considering leasing a computer from UniNet under a 6-year lease. The computer costs $200,000 and will be depreciated as a 5-year MACRS asset. The expected salvage value of the computer after 6 years is $20,000. UniNet's marginal tax rate is 35% and its average tax rate is 30%. UniNet requires a 13% after-tax rate of return on leases of this type. What annual, pretax, beginning-of-the-year lease payment must Unilog make to UniNet? (Problem requires MACRS depreciation tables.) a. $16,848 b. $48,786 c. $31,711 d. $50,500 0.5 points

QUESTION 7 Lease-buy analysis assumes that the alternative to leasing as the source of financing is ____. a. borrowing to buy b. buying with before-tax dollars c. buying with all equity funds d. buying for cash