LEASING QUIZ

The sale of an asset with the agreement to immediately lease it back for an extended period of time.

• Direct Leasing

• Sale and leaseback

• Leveraged Leasing

A lease arrangement in which the lessor provides an equity portion (usually 20 to 40 percent) of the leased asset’s cost, and third-party lenders provide the balance of the financing.

• Sale and leaseback

• Direct Leasing

• Leveraged Leasing

A contract under which one party, the lessor(owner) of an asset, agrees to grant the use of that asset to another, the lessee, in exchange for periodic rental payments.

• Lease

• Net Lease

• Tax Lease

A lease where the lessee maintains and insures the leased asset.

• Tax Lease

• Leasing

• Net Lease

A short-term lease that is often cancellable.

• Direct Lease

• Operating Lease

• Financial Lease

A long-term lease that is not cancellable.

• Financial Lease

• Operating Lease

• Direct Lease

The lease contract typically specifies one or more options to the lessee at expiration.

One option is to simply return the leased asset to the lessor.

• True

• False

The price at which property can be sold in an arm’s length transaction.

• Lease Value

• Residual Value

• Fair Market Value

The value of a leased asset at the end of the lease period.

• Fair Market Value

• Lease Value

• Residual Value

One of the tax effects of Lessors, except:

• Interest income

• Taxable Income

• Deductibility of Lease Payments