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The following terms are often used to describe leases:
a. Direct b. Full-service c. Operating d. Financial e. Rental f. Net g. Leveraged h. Sale and lease-back i. Full-payout
Match one or more of these terms with each of the following statements:
1. The initial lease period is shorter than the economic life of the asset.
2. The initial lease period is long enough for the lessor to recover the cost of the asset.
3. The lessor provides maintenance and insurance.
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4. The lessor buys the equipment from the manufacturer.
5. The lessor buys the equipment from the prospective lessee.
6. The lessor finances the lease contract by issuing debt and equity claims against it.
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