In theory,we may regard the lease alternative as a commitment to finance the asset with what level of debt?

Question

Quizplus · Accepted Answer

The lease alternative involves obtaining the use of an asset in exchange for a series of payments over time. Essentially, the lessor is financing the asset and the lessee is paying for the use of it. This can be regarded as a commitment to finance the asset with 100% debt, as the lessee is not putting any equity towards the purchase. Therefore, the answer is D) 100%.

In Theory,we May Regard the Lease Alternative as a Commitment