Heavy Use of Off-Balance-Sheet Lease Financing Will Tend to

Multiple Choice

Heavy use of off-balance-sheet lease financing will tend to

A) make a company appear more risky than it actually is because its stated debt ratio will be increased.
B) make a company appear less risky than it actually is because its stated debt ratio will appear lower.
C) affect a company's cash flows but not its degree of risk.
D) have no effect on either cash flows or risk because the cash flows are already reflected in the income statement.
E) affect the lessee's cash flows but only due to tax effects.