All of the following must be considered when making a lease-versus-purchase decision EXCEPT
A) the after-tax cash flows for each year under the lease alternative.
B) the after-tax cash flows for each year under the purchase alternative.
C) the present value of all cash flows.
D) the depreciation expense under the lease.

Question

Quizplus · Accepted Answer

All of the other options listed (A, B, and C) are factors that should be considered when making a lease-versus-purchase decision. Depreciation expense under the lease is not necessarily a relevant factor, as the lessor (not the lessee) will typically handle this expense. However, it is still important to evaluate the overall cash flows and costs associated with each option, including any potential tax implications.

All of the Following Must Be Considered When Making a Lease-Versus-Purchase