Asked by Anthony Ornelas on Jun 23, 2024
Verified
Which of the following is the best definition of a lessor?
A) A longer-term, fully amortized lease under which the lessee is responsible for upkeep. Usually not cancellable with-out penalty.
B) The user of an asset in a leasing agreement. Lessee makes payments to lessor.
C) The owner of an asset in a leasing agreement. Lessor receives payments from the lessee.
D) A leveraged lease is a tax-oriented lease involving three parties: a lessee, a lessor, and a lender.
E) The NPV of the decision to lease an asset instead of buying it.
Lessor
The owner of an asset who leases it to another party, known as the lessee, under a lease agreement.
Lessee
An individual or entity that leases an asset from another, the lessor, under the terms of a lease agreement.
Lease Agreement
A contract between two parties where one, the lessor, provides an asset for use to the other, the lessee, for a specific period in exchange for periodic payments.
- Understand the basic definitions and roles involved in a leasing agreement.
Verified Answer
LB
Laura Bond-LucasJun 28, 2024
Final Answer :
C
Explanation :
The best definition of a lessor is the owner of an asset in a leasing agreement, who receives payments from the lessee. This is because the lessor is the party that owns the leased asset and allows the lessee to use it in exchange for periodic lease payments.
Learning Objectives
- Understand the basic definitions and roles involved in a leasing agreement.