Explain the theoretical basis for requiring lessees to capitalize certain long-term leases.
You are the chief financial officer at SD International (SDI). SDI is a small but growing computer hardware retailer. The company plans to purchase new buildings this year. However, SDI has an existing commercial loan with National Commercial Bank (NCB). One of the conditions of the existing loan was for SDI to maintain interest coverage ratio (operating income/interest expense) of […]






