 |  Fundamentals of Corporate Finance, 4/e Stephen A. Ross,
Massachusetts Institute of Technology
Randolph W. Westerfield,
University of Southern California
Bradford D. Jordan,
University of Kentucky
Gordon S. Roberts,
York University
Leasing
Key TermsBelow are the key terms featured in this chapter. Clicking on a term will reveal its definition. The textbook's full glossary is also available for online searching.
| Financial Lease | Typically, a longer-term, fully amortized lease under which the lessee is responsible for upkeep. Usually not cancellable without penalty.
(See Refer to page 744)
| | | | | Lessee | The user of an asset in a leasing agreement. Lessee makes payments to lessor.
(See Refer to page 742)
| | | | | Lessor | The owner of an asset in a leasing agreement. Lessor receives payments from the lessee.
(See Refer to page 742)
| | | | | Leveraged Lease | A financial lease where the lessor borrows a substantial fraction of the cost of the leased asset.
(See Refer to page 745)
| | | | | Marked to Market | Daily settlement of obligations on futures positions.
(See Refer to page 750)
| | | | | Net Advantage to Leasing (NAL) | The NPV of the decision to lease an asset instead of buying it.
(See Refer to page 751)
| | | | | Operating Lease | Usually a shorter-term lease where the lessor is responsible for insurance, taxes, and upkeep. Often cancellable on short notice.
(See Refer to page 744)
| | | | | Sale and Leaseback | A financial lease in which the lessee sells an asset to the lessor and then leases it back.
(See Refer to page 745)
| | | | | Tax-Oriented Lease | A financial lease in which the lessor is the owner for tax purposes. Also called a true lease or a tax lease.
(See Refer to page 745)
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2002 McGraw-Hill Higher Education