If the incremental cash flows from owning versus leasing are compared without explicitly considering debt financing,these returns should be compared to the firm's cost of equity.

Question

Quizplus · Accepted Answer

The incremental cash flows should be compared to the firm's weighted average cost of capital (WACC), not just the cost of equity, as they reflect the overall cost of financing, including both debt and equity.

If the Incremental Cash Flows from Owning Versus Leasing Are