PRC-3 · Chapter 4 · Question 57 of 65
An airline needs an aircraft for 10 years. It signs a contract where it pays regular installments covering the full cost of the plane, and at the end of 10 years, the airline assumes legal ownership. What type of lease is this?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Finance lease
Explanation
In a finance lease, the lessee pays for the entire value of the asset over its useful life and typically assumes ownership at the end of the term, transferring risks and rewards.
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