A capitalized lease affects financial leverage and rate of return calculations.

Name: A capitalized lease affects financial leverage and rate of return calculations.
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A capitalized lease is treated as debt and thus affects financial leverage calculations. It also affects rate of return calculations because the leased assets are considered part of the company's assets, which can increase the company's return on assets (ROA) or return on equity (ROE) ratios.

A Capitalized Lease Affects Financial Leverage and Rate of Return