In the Lease Versus Buy Decision,why Is Leasing Often Preferable

question 41

Multiple Choice

In the lease versus buy decision,why is leasing 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 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:

Simplify

The process of altering an expression to make it easier to understand or work with, often by reducing its complexity.

Solution

The specific value or group of values that meet the criteria of an equation, inequality, or a collection of equations.

Solution

The answer(s) to a problem or equation, where the proposed values satisfy the given conditions.

Complex Conjugate

The pair of a complex number, changing the sign of its imaginary part.