Certified Professional Public Buyer (CPPB) Practice Test

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the Certified Professional Public Buyer Test with our engaging materials. Access multiple choice questions with hints and detailed explanations. Start your journey to certification success today!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

Which type of financial lease allows for full ownership transfer at the end of the lease term?

Partial payout leases
Full payout leases
Operating leases
Sale-leaseback agreements

The correct answer is: Full payout leases

A full payout lease is a type of financial lease that typically allows for the lessee to gain full ownership of the asset at the end of the lease term. In this arrangement, the total lease payments cover both the cost of the asset and the interest, leading to a situation where the lessee has effectively paid for the entire value of the asset by the lease's conclusion. After the completion of the lease term, the lessee is usually given the option to purchase the asset at its residual value, which is often minimal or set at a nominal fee. This contrasts with other lease types, such as operating leases, where the asset is returned to the lessor at the end of the lease, and partial payout leases, which do not provide full ownership transfer rights. Additionally, sale-leaseback agreements involve a sale of an asset, where the seller becomes the lessee, and while they may offer some benefits, they do not inherently provide for ownership transfer at the end of the term in the same manner as a full payout lease. Thus, full payout leases are specifically designed to culminate in ownership, making this the correct answer.