In computing the NPV of the lease/buy decision, the cost of the equipment to be leased represents
a cash inﬂow to the lessor and a cash outﬂow to the lessee.

Question

Quizplus · Accepted Answer

The cost of the equipment to be leased represents a cash outflow to the lessee, but it does not represent a cash inflow to the lessor. The lessor may receive payments from the lessee, but the initial cost of the equipment is not a cash inflow for the lessor.

In Computing the NPV of the Lease/buy Decision, the Cost