[amp_mcq option1=”Investment decision” option2=”Financing decision” option3=”Dividend decision” option4=”None of the above” correct=”option1″]
The correct answer is: A. Investment decision
A lease is an agreement between a lessor (owner of the asset) and a lessee (user of the asset) in which the lessor agrees to allow the lessee to use the asset for a specified period of time in return for periodic payments. For a lesser, a lease is an investment decision because it involves the commitment of resources (the asset) in the expectation of future benefits (the lease payments).
The other options are incorrect because:
- A financing decision is a decision about how to raise funds for a business. A lease is not a financing decision because it does not involve raising funds.
- A dividend decision is a decision about how to distribute profits to shareholders. A lease is not a dividend decision because it does not involve distributing profits.
- None of the above is a correct answer because it does not specify which of the options is correct.