Business, 27.07.2021 17:00 daniel8orange

Previously, a manufacturer of high-quality industrial electrical generators only sold its units to customers, but it has just introduced a leasing program. The generators have expected useful lives of about 25 years, and the company anticipates that the leases will have a term of 20 years or more. If the company reports under International Financial Reporting Standards, which of the following statements about the first year of the new leasing program is most accurate? a. Regardless of how the company classifies the lease, its total cash flow
b. If the lease is classified as an operating lease, the company's profits should be higher for a givenleased asset than they would be under a finance lease.
c. If the lease is classified as a finance lease, it will decrease the company's liquidity position compared with when the company was only selling its generators.

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