Which of the following statements relating to leases is lease likely to be correct? A. Lessors generally prefer sales type to operating leases because of its favorable impact on profitability ratios B. Lessees generally prefer operating to capital leases because of its favorable impact on leverage and profitability ratios C. Operating cash flow throughout the lease term for a lessee is consistently higher in a capital lease than an operating lease D. Operating ash flow through the lease term for a lessor is consistently higher in a sales-type lease than an operating lease
I’ll go with D…sales type lease for lessor only interest is CFO, rest is CFI?
The correct answer is D
LongOnCFA - could you elaborate a bit more on the explanation? i’m a little confused.