If borrowing to purchase the asset would subject the ﬁrm to debt-related restrictions, then this
scenario makes the asset a likely candidate for leasing.

Name: If borrowing to purchase the asset would subject the ﬁrm to debt-related restrictions, then this scenario makes the asset a likely candidate for leasing.
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Question

Quizplus · Accepted Answer

If the firm is subject to debt-related restrictions, then leasing may be a more favorable option since leasing is not considered debt and therefore does not have the same restrictions.

If Borrowing to Purchase the Asset Would Subject the ﬁRm