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QUESTION: 229

The principal reason for the existence of leasing is that:

Intermediate-term loans are difficult to obtain
This is a type of financing unaffected by changes in tax law
Companies, financial institutions, and individuals derive different benefits from owning
Leasing is a renewable source of intermediate-term funds

Answer(s): C

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QUESTION: 230

A way to analyze whether debt or lease financing would be preferable is to:

Compare the net present values under each alternative, using the cost of capital as the discount rate
Compare the net present values under each alternative, using the after-tax cost of borrowing as the discount rate
Compare the payback periods for each alternative
Compare the effective interest costs involved for each alternative

Answer(s): B

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QUESTION: 231

A conventional revolving credit agreement allows:

To borrow a fixed amount for the entire commitment period
To borrow for a short-period with a right to renew the loan during the commitment period
To possibly include a provision to convert the credit agreement into a term loan contract at maturity
All of the above

Answer(s): D

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QUESTION: 232

The type of lease that includes a third party, a lender, is called a(n):

Sale and leaseback
Direct leasing arrangement
Leveraged lease
Operating lease

Answer(s): C

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JUAN commented on June 28, 2023
aba questions to practice
UNITED STATES
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JUAN commented on June 28, 2023
aba questions to practice
UNITED STATES
upvote

Alo commented on November 12, 2018
we shall see, just downloaded. Will report back
Anonymous
upvote