You Should Lease Rather Than Buy When The

question 61

Multiple Choice

You should lease rather than buy when the:

• A) IRR from leasing exceeds the aftertax cost of borrowing.
• B) annual loan payments for a purchase are less than the annual lease payments.
• C) NAL from leasing is positive.
• D) IRR from leasing exceeds the risk-free rate of return.
• E) asset's life is less than five years.

---

Definitions:

Air Pressure Regulator

A device that maintains a constant output air pressure regardless of variations in input pressure and flow requirements.

Pneumatics

The technology or method of using pressurized air to effect mechanical motion or control systems.

RoadRanger

A range of heavy-duty manual transmissions found in large trucks, known for their durability and performance.

Transmission Gear Ratios

The ratio of the gears in a transmission that dictate how much power is transmitted from the engine to the wheels.