Exam 19: Leasing | Examlex

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a synthetic lease a special purpose entity (SPE) is set up by a corporation that wants to acquire the use of an asset The SPE borrows up to 97% of its capital, uses its funds to buy the asset, and then leases it to the sponsoring corporation on a short-term basis This keeps both the asset and the debt off the sponsoring company's books.

A) True
B) False

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sale and leaseback arrangement is a type of financial, or capital, lease.

A) True
B) False

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