Joe Genius of ABC Corporation Is Considering Whether to Engage

Joe Genius of ABC Corporation is considering whether to engage in a financial lease or to purchase a large capital asset. If Joe purchases the asset, he will use debt financing.

A) Which of the following accurately describes the similarities in the tax treatment of leasing and purchasing with debt?
B) The after-tax net present value of the two methods will usually be identical.
C) The timing of cash payments and tax savings is the same under both alternatives.
D) Capital cost allowance is always expensed for both alternatives.