From the lessee's point of view, if the Net Present Value of a lease equals zero, then...
A) ...the lessee would be paying the lowest payments possible while the lessor gets a return that just covers the cost of capital
B) ...the lessor is charging the maximum annual lease rate (payment) possible, and the lessee would be better off purchasing the asset
C) ...there is nothing to gain from the lease, and it is preferable to purchase the asset
D) ...the cost of leasing equals the cost of purchasing the asset

Question

Quizplus · Accepted Answer

If the Net Present Value of a lease equals zero, it means that the cost of leasing the asset over the lease term is equal to the cost of purchasing the asset outright. Therefore, the lessee would be indifferent between leasing and purchasing, and it would depend on their specific circumstances and preferences as to which option is more favorable.

From the Lessee's Point of View, If the Net Present