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Which of the following statements about leasing is false?ALease financing is a substitute for
debt financing.
Solution
Lease is defined as a contract between two parties for use of assets of one parties by paying rent
for using assets. the owner of assets is calls Lessor and the person who use assets is called
Lessee. In lease analysis residual value that is value of assets at end of lease contract must be
considered. In operating lease maintainance expense should be paid by lessee only. Lease is
considered as substitute for debt financing.
So, Incorrect statement about lease contract option (E).

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Which of the following statements about leasing is falseALease fina.pdf

  • 1. Which of the following statements about leasing is false?ALease financing is a substitute for debt financing. Solution Lease is defined as a contract between two parties for use of assets of one parties by paying rent for using assets. the owner of assets is calls Lessor and the person who use assets is called Lessee. In lease analysis residual value that is value of assets at end of lease contract must be considered. In operating lease maintainance expense should be paid by lessee only. Lease is considered as substitute for debt financing. So, Incorrect statement about lease contract option (E).