Question

If a financial analysis of a lease shows a negative result of $500, a manufacturer could...

If a financial analysis of a lease shows a negative result of $500, a manufacturer could alter the lease terms to make leasing profitable by:

A)

raising salvage value by lowering the discount rate.

B)

cutting his price to the lessor by more than $500.

C)

raising the CCA rate for the lessor.

D)

raising the lease terms.
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Answer #1

This question can be thought of a typical question of cash flow analysis.

If the lessor increases the lease term (number of payments), the value of -500 can be shifted to some positive value.

Hence, the answer is

D)

raising the lease terms.

Please do rate me and mention doubts, if any, in the comments section.

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