Which is a factor considered by the lessor

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Reference no: EM132714487

Problem 1: Managers will often have strong incentives to favour operating leases over finance leases. This is because:

Select one:

a. finance leases are recorded on the balance sheet. This results in a decreased debt ratio and a lower return on total assets

b. finance leases are recorded on the balance sheet. This results in an increased debt ratio and a lower return on total assets

c. None of the responses. Managers do not prefer operating leases

d. operating leases are recorded on the balance sheet. This results in an increased debt ratio and a lower return on total assets

Problem 2: Which of the following is a factor considered by the lessor at the commencement date regarding the possible termination of a lease?

Select one:

a. Purchase options that are significantly above market rates

b. The amount of any fixed payments

Reference no: EM132714487

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