A lessee's option to purchase a leased asset at a price that is substantially lower than the asset's fair value is referred to as a(n) ________.
A) bargain purchase option
B) guaranteed purchase option
C) early purchase option
D) residual purchase option

Question

Quizplus · Accepted Answer

A bargain purchase option allows the lessee to buy the leased asset at a price significantly lower than its fair value, making it an attractive option for the lessee.

A Lessee's Option to Purchase a Leased Asset at a Price