Call us 24/7: + 1(925)399 0085

Get your paper done by an expert

No matter what kind of academic paper you need, it is simple and secure to hire an essay writer for a price you can afford at StudyAcer. Save more time for yourself.

WhatsApp + 1(925)399 0085
$ 10
free
  • bibliography
  • title page
  • revisions
per page
19 k happy customers
4.7 out of 5 satisfaction rate
27 writers active

fin540

 

 

 

FIN 540 – Homework Chapter 19

 

© 2013 Strayer University. All Rights Reserved. This document contains Strayer University Confidential and Proprietary information

 

and may not be copied, further distributed, or otherwise disclosed in whole or in part, without the expressed written permission of

 

Strayer University.

 

FIN 540 Homework Chapter 19

 

Page 1 of 2

 

Directions: Answer the following five questions on a separate document. Explain how you reached the

 

answer or show your work if a mathematical calculation is needed, or both. Submit your assignment using

 

the assignment link in the course shell. Each question is worth five points apiece for a total of 25 points

 

for this homework assignment.

 

1. Operating leases often have terms that include

 

a. full amortization over the life of the lease.

 

b. very high penalties if the lease is canceled.

 

c. restrictions on how much the leased property can be used.

 

d. much longer lease periods than for most financial leases.

 

e. maintenance of the equipment by the lessor.

 

2. Which of the following statements is most CORRECT?

 

a. Capitalizing a lease means that the firm issues equity capital in proportion to its current

 

capital structure, in an amount sufficient to support the lease payment obligation.

 

b. The fixed charges associated with a lease can be as high as, but never greater than, the

 

fixed payments associated with a loan.

 

c. Capital, or financial, leases generally provide for maintenance by the lessor.

 

d. A key difference between a capital lease and an operating lease is that with a capital

 

lease, the lease payments provide the lessor with a return of the funds invested in the

 

asset plus a return on the invested funds, whereas with an operating lease the lessor

 

depends on the residual value to realize a full return of and on the investment.

 

e. Firms that use “off balance sheet” financing, such as leasing, would show lower debt

 

ratios if the effects of their leases were reflected in their financial statements.

 

3. Financial Accounting Standards Board (FASB) Statement #13 requires that for an unqualified

 

audit report, financial (or capital) leases must be included in the balance sheet by reporting the

 

a. residual value as a liability.

 

b. present value of future lease payments as an asset and also showing this same amount

 

as an offsetting liability.

 

c. undiscounted sum of future lease payments as an asset and as an offsetting liability.

 

d. undiscounted sum of future lease payments, less the residual value, as an asset and as

 

an offsetting liability.

 

e. residual value as a fixed asset.

 

4. Heavy use of off-balance sheet lease financing will tend to

 

a. make a company appear less risky than it actually is because its stated debt ratio will

 

appear lower.

 

b. affect a company’s cash flows but not its degree of risk.

 

c. have no effect on either cash flows or risk because the cash flows are already reflected in

 

the income statement.

 

d. affect the lessee’s cash flows but only due to tax effects.

 

e. make a company appear more risky than it actually is because its stated debt ratio will be

 

increased.

 

FIN 540 – Homework Chapter 19

 

© 2013 Strayer University. All Rights Reserved. This document contains Strayer University Confidential and Proprietary information

 

and may not be copied, further distributed, or otherwise disclosed in whole or in part, without the expressed written permission of

 

Strayer University.

 

FIN 540 Homework Chapter 19

 

Page 2 of 2

 

5. In the lease versus buy decision, leasing is often preferable

 

a. because, generally, no down payment is required, and there are no indirect interest

 

costs.

 

b. because lease obligations do not affect the firm’s risk as seen by investors.

 

c. because the lessee owns the property at the end of the least term.

 

d. because the lessee may have greater flexibility in abandoning the project in which the

 

leased property is used than if the lessee bought and owned the asset.

 

e. because it has no effect on the firm’s ability to borrow to make other investments.

 

Our guarantees

Study Acers provides students with tutoring and help them save time, and excel in their courses. Students LOVE us!No matter what kind of essay paper you need, it is simple and secure to hire an essay writer for a price you can afford at StudyAcers. Save more time for yourself. Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

Our Homework Writing Disciplines

With a highly diverse team in almost all academic fields including:


Warning: Invalid argument supplied for foreach() in /home/acemfljg/public_html/wp-content/themes/essay-writing/footer.php on line 12