Given Which Assumption Should a Lease Versus Purchase Analysis Compare

question 22

Multiple Choice

Given which assumption should a lease versus purchase analysis compare the cost of leasing to the cost of owning?

• A) assuming that the asset purchased is financed with short-term debt
• B) assuming that the asset purchased is financed with long-term debt
• C) assuming that the asset purchased is financed with debt whose maturity matches the term of the lease
• D) assuming that the asset purchased is financed with retained earnings