True or False:

11) One possible advantage of leasing an asset rather than borrowing and buying it is that the lessee is less constrained than the borrower who is going to buy the asset.

13) Payments for asset leases are regularly made at the beginning of the contract, so they are considered ordinary annuities.

14) The payback period of the investment (Payback period) of a project is the time necessary to generate an NPV of zero.

17)According to the IRS, the lessee must have the option to purchase the asset at the expiration of the contract for an amount not less than 90% of the original cost of the asset.

18) If a project has multiple IRRs, the project with the higher of the two IRRs should be selected.

20)In order to be deductible as a capital lease on the Income Statement according to the IRS, the asset must be subject to depreciation.

21) It is considered as an investment alternative in fixed assets that implies the application of capital budgeting principles.

24) An advantage of the sale and subsequent leasing of the asset (sales-and-leaseback) is that you can use the asset and at the same time have capital to invest in the company.

25) The decision between leasing or buying a fixed asset is based on an evaluation of the present value of the cash outflows of both alternatives. The one with the highest present value between the two options is then decided.