. What impact does a bargain purchase option have on the present value of the lease payments computed by the lessee? The lease payments would be increased by the option price. The lessee must increase the present value of the lease payments by the present value of the option price. There is no impact as the option does not enter into the transaction until the end of the lease term. The lessee must decrease the present value of the lease payments by the present value of the option price.
. What impact does a bargain purchase option have on the present value of the lease payments computed by the lessee? The lease payments would be increased by the option price. The lessee must increase the present value of the lease payments by the present value of the option price. There is no impact as the option does not enter into the transaction until the end of the lease term. The lessee must decrease the present value of the lease payments by the present value of the option price.
Chapter19: Lease And Intermediate-term Financing
Section: Chapter Questions
Problem 2QTD
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29.
What impact does a bargain purchase option have on the present value of the lease payments computed by the lessee?
The lease payments would be increased by the option price.
The lessee must increase the present value of the lease payments by the present value of the option price.
There is no impact as the option does not enter into the transaction until the end of the lease term.
The lessee must decrease the present value of the lease payments by the present value of the option price.
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