Which of the following is the deﬁnition of a leveraged lease?
A) An operating lease in which the lessee borrows a large portion of the lease payments.
B) A ﬁnancial lease in which a ﬁrm sells an asset to the lessor and then leases it.
C) A long-term, fully amortized lease in which the lessee is responsible for asset upkeep.
D) A short-term lease in which the lessor is responsible for insurance, taxes, and upkeep.
E) A lease in which the lessor borrows a large portion of the cost of the leased asset.

Question

Quizplus · Accepted Answer

In a leveraged lease, the lessor borrows a significant portion of the cost of the asset being leased, typically using the asset itself as collateral.

Which of the Following Is the Deﬁnition of a Leveraged