In the Lease-Versus-Buy Decision,leasing Is Often Preferable

question 7

Multiple Choice

In the lease-versus-buy decision,leasing is often preferable

• A)because it has no effect on the firm's ability to borrow to make other investments.
• B)because, generally, no down payment is required, and there are no indirect interest costs.
• C)because lease obligations do not affect the firm's risk as seen by investors.
• D)because the lessee owns the property at the end of the lease term.
• E)because the lessee may have greater flexibility in abandoning the project in which the leased property is used than if the lessee bought and owned the asset.

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Definitions:

Physical Object

An entity that exists in the physical world and can be perceived by the senses.

Manufactured Object

An item or product that has been created or produced through a manufacturing process, typically involving machinery and human labor.

Toy

An object designed for children to play with, often aiding in learning and development through entertainment.

Ball

A round object typically used in games and sports, which can vary in size, material, and design.