A lease where the lessee can purchase the asset at the minimum of its fair market value and a fixed price is called a:
A)$1.00 out lease.
B)fixed price lease.
C)fair market value lease.
D)fair market value cap lease.
E)synthetic lease.

Question

Quizplus · Accepted Answer

A fair market value cap lease allows the lessee to purchase the asset at the minimum of its fair market value and a fixed price, which is capped. This option provides some protection to the lessee in case the fair market value of the asset is higher than anticipated.

A Lease Where the Lessee Can Purchase the Asset at the Minimum