Question

Sam leases a car for 24 months. The car will cost him $7,000 if he decides to buy it at the end of the lease. What term describes the $7,000? A. interest B. residual value C. lease amount

Answer 1

Term that describes $7,000 is:

B. residual value

Explanation:

We are given that:

Sam leases a car for 24 months. The car will cost him $7,000 if he decides to buy it at the end of the lease.

Then the term that describes $7000 is

B. residual value

(Since, The residual value is the estimated value of a fixed asset at the end of its lease or at the end of its useful life.)

Answer 2

It is called RESIDUAL VALUE. Residual value is defined as the value of the asset after it was fully depreciated.