Question

Which two of the following five statements are correct?

Select two alternatives:

• By offering assets together with complementary services, lessors can achieve efficiency gains and offer attractive lease rates.
• The decision to lease is often driven by real-world market imperfections related to leasing's accounting, tax, and legal treatment.
• The lease is treated as a capital lease (financial lease) for the lessee and must be listed on the firm's balance sheet if it contains an option to purchase the asset at its fair market value.
• In a direct lease, the lessor is the manufacturer (or a primary dealer) of the asset.
• In some circumstances, the lessor is not an independent company but rather a separate business partnership, called a special-purpose entity (SPE), which is created by the lessor for the sole purpose of obtaining the lease.