Leasing is typically a financing decision and not a capital budgeting decision.Thus,the availability of lease financing cannot affect the size of the capital budget.

Question

Quizplus · Accepted Answer

Lease financing can affect the size of the capital budget as it provides an alternative source of funding for capital projects. If lease financing is available, an organization may choose to use it to acquire assets rather than using its capital budget. Therefore, the availability of lease financing may impact the size of the capital budget.

Leasing Is Typically a Financing Decision and Not a Capital