Question
Which of the following statements is FALSE? A. In a non-tax lease, the lessee not only receives the depreciation deductions but also deducts the interest
Which of the following statements is FALSE?
A.
In a non-tax lease, the lessee not only receives the depreciation deductions but also deducts the interest portion of the lease payments as an interest expense.
B.
To compare leasing to borrowing, we must determine the amount of the loan that leads to the same level of fixed obligations that a firm would have with the lease.
C.
If a larger portion of an assets residual value is held by the lessee, the lessee is more likely to take good care of this asset.
D.
Other things equal, the lessee pays a lower lease payment for lease contracts that contain buyout options that allow the lessee to purchase the asset before the end of the lease term.
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