Which of the following statements are true? Indicate the correct answer.
1. Tax shield on depreciation and interest is an important valuable both for lessor and lessee.
2. A lessee may evaluate the lease options as against the buying option.
3. Sale and lease back and leveraged lease are types of financial lease.
4. Lease or financing is a type of capital budgeting decision from the point of view of the lessee.
Select the correct answer
A. 1, 2 and 4
B. 2, 3 and 4
C. 1, 3 and 4
D. 1, 2 and 3
Answer: Option D
This Question Belongs to Commerce >> Business Finance
The appropriate ratio for indicating liquidity crisis is
A. Operating ratio
B. Sales turnover ratio
C. Current ratio
D. Acid test ratio
A. Net present value method
B. Internal rate of return method
C. Profitablity index method
D. None of the above
A. a-4, b-3, c-1, d-2
B. a-3, b-4, c-1, d-2
C. a-2, b-3, c-1, d-4
D. a-3, b-2, c-4, d-1
Which one of the following assumptions is not included in the James E. Walter Valuation model?
A. All financing by retained earnings only
B. No change in the key variables such as EPS and DPS
C. The firm has finite life
D. All earnings are either distributed as dividends or invested internally immediately
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