Gratzia Cross Country Skiing Inc told Power Leasing Inc that it wanted to acquire a machine that cuts cross-country ski tracks.Gratzia enters into a lease under which the Power Leasing will buy a track-cutting machine and then lease it to Gratzia for three years.The lease payments will pay Power the full amount of the purchase price plus a return of 14 percent per year.At the end of the three years,Gratzia has an option to buy the machine for $1.This transaction is similar in effect to a secured financing.Power should file a financing statement to register its title to the track-cutting machine under the applicable provincial personal property security legislation to protect his interest.

Question

Quizplus · Accepted Answer

Since Power Leasing is purchasing the track-cutting machine and leasing it to Gratzia, it has a security interest in the machine. To protect its interest, Power should file a financing statement to register its title to the machine under the applicable provincial personal property security legislation. This statement will establish Power's priority over other creditors in case of default by Gratzia. Therefore, the statement mentioned in the given scenario is true.

Gratzia Cross Country Skiing Inc Told Power Leasing Inc That