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Open-end Lease

A lease in which the lessee guarantees the amount of the future residual value to be realized by the lessor at the end of the term. If the equipment is sold for less than the guaranteed value, the lessee must pay the amount of any deficiency to the lessor. The lease is referred to as open-end because the lessee does not know its actual value until the equipment is sold at the end of the lease.

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