The before-tax cost of risk-free debt is the appropriate discount rate for net present value analysis of lease costs.

Name: The before-tax cost of risk-free debt is the appropriate discount rate for net present value analysis of lease costs.
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The after-tax cost of debt is the appropriate discount rate for net present value analysis of lease costs, as it reflects the actual cost to the company after accounting for the tax deductibility of interest expenses.

The Before-Tax Cost of Risk-Free Debt Is the Appropriate Discount