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As a Practical Matter, the Lessee Uses a Single Discount

Question 64

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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