Lessor gets fixed amount of lease rental every year and they cannot increase this even if the cost of asset goes up.

True

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False

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Solution

The correct option is A True
Lessor gets fixed amount of lease rental every year and they cannot increase this even if the cost of asset goes up- this is a true statement.While making the leasing decision, the cost of leasing an asset must be compared with the cost of owning the same.

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Similar questions

Q. The lessee pays a _________ periodic amount called lease rental to the lessor for the use of the asset.

Under the lease agreement, the lessee gets the right to

(a) Share profits earned by the lessor

(b) Participate in the management of the organisation

(d) Sell the assets

___is a method of depreciation, in which the cost of the asset is spread uniformly over the life years by writing off a fixed amount every year, where as in ___ method of depreciation, a fixed rate of depreciation is charged on the book value of the asset over its useful life.

Q. The type of lease requiring an agreement between the financier and lessor is known as ________.

The annual depreciation charge in ________ remains fixed during the life of the asset. In contrast, the amount of depreciation in ______ method diminishes every year.

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Lessor gets fixed amount of lease rental every year and they cannot increase this even if the cost of asset goes up.

The correct option is A TrueLessor gets fixed amount of lease rental every year and they cannot increase this even if the cost of asset goes up- this is a true statement.While making the leasing decision, the cost of leasing an asset must be compared with the cost of owning the same.

The correct option is A True
Lessor gets fixed amount of lease rental every year and they cannot increase this even if the cost of asset goes up- this is a true statement.While making the leasing decision, the cost of leasing an asset must be compared with the cost of owning the same.