full payment lease definition

full payment lease

Lease arrangement in which a seller or owner (the lessor) of the leased asset or property recovers the full cost (original cost plus profit margin, interest, and other charges) of the item, with little or no dependence on the residual value of the item for any return. Lease period (term) for such leases is usually equal to the economic life of the asset. A capital lease is a full-payment lease whereas an operating lease is not. Also called full payout lease.

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