When is the Investment Tax Credit entered as a benefit in a lease-or-purchase analysis?
A) When the alternative is to lease the asset
B) When the alternative is to purchase the asset
C) In both alternatives, regardless or whether the asset is leased or purchased
D) It is not entered in this type of analysis at all

Question

Quizplus · Accepted Answer

The Investment Tax Credit is entered as a benefit in a lease-or-purchase analysis when the alternative is to purchase the asset. It is not relevant when considering the lease alternative as the lessor typically claims the tax credit benefit. Therefore, it is only entered in the purchase alternative.

When Is the Investment Tax Credit Entered as a Benefit