BUSINESS FIN CHAPTER 6

What is a lease?

• A loan agreement

• A rental agreement

• A purchase agreement

• A financing agreement

Which of the following is NOT a type of lease?

• Capital lease

• Operating lease

• Finance lease

• Profit lease

Which type of lease is commonly used for equipment?

• Capital lease

• Operating lease

• Finance lease

• All of the above

Which type of lease is also known as a "true lease"?

• Capital lease

• Operating lease

• Finance lease

• Sale and leaseback

Which type of lease allows the lessee to purchase the leased asset at the end of the lease term?

• Capital lease

• Operating lease

• Finance lease

• All of the above

In a finance lease, who is responsible for maintaining the leased asset?

• The lessor

• The lessee

• The manufacturer

• A third-party maintenance company

What is a sale and leaseback arrangement?

• When the lessor sells the leased asset to the lessee

• When the lessee sells the leased asset to the lessor and then leases it back

• When the lessor and lessee switch roles

• None of the above

What is leasing?

• A legal agreement between a lessee and a lessor

• The process of purchasing an asset

• A type of insurance policy

What is a lessor?

• The party who leases an asset

• The party who purchases an asset

• The party who sells an asset

What is a lessee?

• The party who leases an asset

• The party who purchases an asset

• The party who sells an asset