the lease versus buy decision, leasing is often preferable
A) because, generally, no down payment is required, and there are no indirect interest costs.
B) because lease obligations do not affect the firm's risk as seen by investors.
C) because the lessee owns the property at the end of the least term.
D) because the lessee may have greater flexibility in abandoning the project in which the leased property is used than if the lessee bought and owned the asset.
E) because it has no effect on the firm's ability to borrow to make other investments.

Question

Quizplus · Accepted Answer

Leasing provides greater flexibility in abandoning the project because the lessee does not own the asset and can simply return it to the lessor at the end of the lease term.

The Lease Versus Buy Decision, Leasing Is Often Preferable