What Is the Incremental Borrowing Rate

What is the incremental borrowing rate?

A) The interest rate that the lessor would have to pay on a similar lease or loan.
B) The interest rate that the lessee would have to pay on a similar lease or loan.
C) The risk adjusted interest rate from the cash flow stream expected by the lessor.
D) The risk adjusted interest rate from the cash flow stream expected by the lessee.

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