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As a Practical Matter, the Lessee Uses a Single Discount

Question 100

Multiple Choice

As a practical matter, the lessee uses a single discount rate for lease analysis, but a more refined approach would do which of the following?


A) use a different discount rate for every line on the lease analysis' cash flows, and so reflect differing risk for each cash item.
B) use a zero discount rate for the lease payment, a high rate only for the CCA tax benefits, and a middle rate for the other cash flows.
C) use one discount rate for the lease tax shelter, and another for the other cash flows.
D) use a low, middle, and high discount rate and pick the average result.

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