What is not a key variable considered in deciding on the on the rate of return?

Question

What is not a key variable considered in deciding on the on the rate of return?

A) the length of the lease
B) the status of the residual value (guaranteed or unguaranteed)
C) the lessee’s credit standing
D) the type of asset being leased
What is not a key variable considered in deciding on the on the rate of return?

A) the length of the lease
B) the status of the residual value (guaranteed or unguaranteed)
C) the lessee’s credit standing
D) the type of asset being leased
What is not a key variable considered in deciding on the on the rate of return?

A) the length of the lease
B) the status of the residual value (guaranteed or unguaranteed)
C) the lessee’s credit standing
D) the type of asset being leased

Explanation / Answer

The correct answer is option " B " i.e. the status of the residual value ( guaranteed or unguaranteed )

As the status of residual value does not effect the rate of return and it is not key variable to deciding the rate of return inspire of all other 3 option which is important for deciding the rate of return as in option A more the length of lease more we get the rate of return

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