Q1. Penguin Company is planning to lease a $5 million machine to produce goods for eventual sale. Penguin is able to structure the lease so as to classify it as either an operating or a finance lease. Advantages to Penguin of classifying this lease as an operating lease are least likely to include that: A) depreciation is not recorded. B) the lease is not reported as debt on Penguin's balance sheet, so leverage ratios are not increased. C) no disclosures of payments due under the lease are required.
Q2. The lessee has an incentive to classify a lease as an operating lease, rather than as a finance lease, because an operating lease: A) has no risk involved because the lessor assumes all risk. B) has payments that are less than a capital lease's payments. C) does not appear on the balance sheet.
Q3. A lessee most likely has an incentive to structure a lease as an operating lease rather than a finance lease when it: A) has a high debt-to-equity ratio. B) does not have debt covenants. C) is very profitable.
Q4. Compared to a finance lease, an operating lease is most likely to be favored when: A) management compensation is not based on returns on invested capital. B) at the end of the lease, the lessee may be better able to sell the asset than the lessor. C) the lessee has bond covenants relating to financial policies.
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发表于 2009-1-19 11:40
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