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Question
Present value interest factors are:On Ford's books, this lease is treated as a/an
A. operating lease.
B. capital lease.
C. direct financing capital lease.
D. sales-type capital lease.
Answer
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Because covenant compliance can be jeopardized by mandated changes in accounting principles, many loan agreements have financial covenants that rely on the accounting rules in place when the loan is first granted.
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C. all operating costs, depreciation, taxes, and a fair return on invested capital.
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B. short-term incentives.
C. long-term incentives.
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C. negative restrictions.
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B. borrowers.
C. both lenders and borrowers.
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