In a financial lease, the lessor must receive more than the asset's purchase price in order to earn its required return. However, in an operating lease, the total payments made by the lessee to the lessor are generally less than the lessor's initial cost of the leased asset.

Question

Quizplus · Accepted Answer

In a financial lease, the lessor receives payments that cover the cost of the asset plus interest and other charges, resulting in a return on investment.

In a Financial Lease, the Lessor Must Receive More Than