Financial leases are typically non-cancellable, meaning the lessee is obligated to make payments for the entire lease term, and early termination usually incurs a substantial penalty.

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Financial Leases

Question 206

Multiple Choice

Financial leases:

A) Are generally not cancellable without substantial penalty to the lessee.
B) Are always cancellable at any time with no penalty to the lessee.
C) May be cancellable but only at the option of the lessor.
D) May be cancellable by the lessor but only with substantial penalty to the lessor.
E) May be cancellable by either party at any time without penalty.

Correct Answer: