If the lessor borrows much of the purchase price of a leased asset, the lease is called:
A) a leveraged lease.
B) a sale-and-leaseback.
C) a capital lease.
D) a nonrecourse lease.

Question

Quizplus · Accepted Answer

A leveraged lease involves the lessor borrowing a significant portion of the purchase price of the asset being leased. This financing structure allows the lessor to leverage their investment by using debt to finance a large portion of the asset's cost.

If the Lessor Borrows Much of the Purchase Price of a Leased