The lease term is typically considered to be Multiple choice question. 75% of the expected life of the asset. the contractual term of the lease plus any periods covered by options to extend if extension is reasonably certain to occur. the contractual term of the lease plus any periods covered by options to extend regardless of certainty of extension. 90% of the economic life of the asset.

CE = 3

Step-by-step explanation:

Given:

AE = 3

EB = 4

CE = x

ED = x + 1

Required:

CE

Solution:

First we need to determine the value of x by generating am equation as follows:

CE × ED = AE × EB (Interacting Chords Theorem)

Substitute

x × (x + 1) = 3 × 4

x² + x = 12

Subtract 12 from each side

x² + x - 12 = 12 - 12

x² + x - 12 = 0

Factorize to find the value of x

x² + 4x - 3x - 12 = 0

x(x + 4) -3(x + 4) = 0

(x - 3)(x + 4) = 0

x - 3 = 0

x = 3

Or

x + 4 = 0

x = -4

Let's use the positive value of x

CE = x = 3