A Lease Option Is a Clause That Grants an Option

Multiple Choice

A lease option is a clause that grants an option holder the right, but not the obligation, to renew the lease, cancel the agreement, relocate within a property, or even expand to adjacent space. The existence of these options in a leasing agreement:

A) reduces the expected present value of lease cash flows to the owner
B) increases the expected present value of lease cash flows to the owner
C) does not impact the expected present value of lease cash flows to the owner
D) causes the expected present value of lease cash flows to equal zero