Which of the following is the best deﬁnition of a sale and leaseback?
A) A shorter-term lease where the lessor is responsible for insurance, taxes, and upkeep.
B) A ﬁnancial lease in which the lessee sells an asset to the lessor and then leases it back.
C) A ﬁnancial lease in which the lessor is the owner for tax purposes. Also called a true lease or a tax lease.
D) A leveraged lease is a tax-oriented lease involving three parties: a lessee, a lessor, and a lender.
E) A longer-term, fully amortized lease under which the lessee is responsible for upkeep. Usually not cancellable with-out penalty.

Question

Quizplus · Accepted Answer

A sale and leaseback is a financial lease in which the lessee sells an asset to the lessor and then leases it back. This is typically done to free up cash or to take advantage of tax benefits.

Which of the Following Is the Best Deﬁnition of a Sale