Please Help with the following:

Question 1

TLE has a net advantage to leasing of ($10,000). What does a negative NAL indicate?

A.	TLE should use equity to buy the asset rather than use debt
B.	TLE should not acquire the asset
C.	TLE should use debt to buy the asset rather than lease it

Question 2

Short-term leases with a cancellation option

A.	Operating leases
B.	Sale and leaseback
C.	Financial leases

Question 3

If Ajax wants to adapt equipment for a specific need, then they should

A.	buy the equipment
B.	lease the equipment

Question 4 In a sale and lease-back the lessee gets cash now in exchange for future payments.

True

False

Question 5 A leveraged lease involves the lessee borrowing part of the purchase price.

True

False

Question 6 The lessor is the user of the asset

True

False

Question 7 The reason the IRS is concerned about leases is that leases can be set up to avoid taxes.

True

False

Question 8

Penn State (PSU) decides to lease equipment from Navistar. The cost of the equipment is $80,000 and there is no salvage value. The before-tax interest rate is 15%. Penn State has a tax rate of 0%. Navistar's tax rate is 40%. Depreciation is straightline over 8 years. There are 9 PRE-PAID lease payments of $17,090 per year. What is the net advantage to leasing for the lessee (PSU)?

A.	-5784
B.	-31,680
C.	9147
D.	44,286
E.	-13,778

Question 9

When Acme leases an asset from National, thengets the asset when the lease expires. When Acme borrows money and buys the asset from National, thengets the asset when the loan is paid off.

Question 10

You are looking at a lease agreement. The net advantage of leasing (NAL) for the lessee is $2M and the NAL for the lessor is $14M. What is the NAL for the government (in M)?