Alfredo has a non-cancelable, five year lease on an industrial-grade sewing machine for stitching upholstery. For accounting purposes, this is considered to be a capital lease. The life of the sewing machine is five years. Alfredo must pay all taxes and insurances related to this lease. Which type of lease does Alfredo have on this sewing machine?
Refer to section 27.1
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5.
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A financial lease in which the lessor is the owner for tax purposes is called a(n) _____ lease.
Refer to section 27.1
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6.
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Heavy Equipment Rentals borrows money on a nonrecourse basis from The Financial Group to fund its purchases of construction equipment such as backhoes, graders, earth movers, etc. This equipment is then leased to contractors. The leases are classified as tax-oriented leases. Which one of the following terms best describes these lease of construction equipment?
Refer to section 27.1
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7.
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Brentwood Industries is selling its tool and die equipment to Upward Financial and then leasing that equipment from Upward for a period of ten years, which is the useful remaining life of the equipment. Which type of lease arrangement is this?
Refer to section 27.1
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8.
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You are comparing a lease to a purchase. The NPV associated with this analysis is referred to as the:
Refer to section 27.5
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9.
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Which one of the following statements is correct concerning the lease versus buy decision?
Refer to section 27.1
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10.
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In a direct lease, the lessor:
I. is the end user of the asset. II. rents the leased asset from the manufacturer. III. owns the asset. IV. is generally an independent leasing company.
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