Lease-buy analysis assumes that the alternative to leasing as the source of financing is ____.
A) buying for cash
B) borrowing to buy
C) buying with all equity funds
D) buying with before-tax dollars

Question

Quizplus · Accepted Answer

Lease-buy analysis typically compares the cost of leasing to the cost of borrowing to buy the asset. This is because both options involve a financing cost, making borrowing to buy the most direct alternative to leasing.

Lease-Buy Analysis Assumes That the Alternative to Leasing as the Source