From The Lessee S Viewpoint The Relevant Discount Rate For Evaluating A Lease Versus Buy Decision Is The Essays and Term Papers

  • Lease Versus Buy: Decisions

    Lease versus Buy Decisions In this paper, a determination will be made as to which option is more cost-effective. A consideration of intangibles such as the possibility that the product will become obsolete (if you are considering purchasing) or that your need for the product will expire before the...

    1466 Words | 5 Pages

  • Real Estate and Capital Structure Decisions – Lease-Versus-Buy Analysis

    IV. References 5 V. Appendix 6 I. Introduction Overview This case provides real estate market data for the analysis of an office lease-or-buy decision. The case demonstrates what is known as the “leasing puzzle” – the answer simply being that the two forms of financing are not cost equivalent...

    1163 Words | 4 Pages

  • Lease vs. Buy Decisions

    Lease vs. Buy and the Impact on Capital Budgeting Risks & Uncertainties: • Purchase requires a significant cash outlay in the form of a down payment at the date of purchase. • Purchasing equipment will add additional debt/liabilities on the balance sheet. • Leasing minimizes the amount of cash...

    683 Words | 3 Pages

  • Analyzing Lease vs. Buy Decisions

    Running head: ANALYZING LEASE VS. BUY DECISIONS Analyzing Lease vs. Buy Decisions Bonnesante Research is a start up business in Irvine, California focusing on biotech, and is based on 30 employees. As it grows, company’s asset acquisition needs to be focused. Bonnesante needs to submit its...

    1163 Words | 3 Pages

  • Lease vs. Buy Decisions Simulation

    Everyday companies are faced with the decision of whether to lease or to buy when acquiring assets. By being able to calculate the best decision for both options, a company will be able to make the most profitable choice; however, some tough questions will need to be answered. For example, what is the...

    1054 Words | 3 Pages

  • Simulation: Lease vs. Buy Decision

    needs to acquire mainframe computer. Now the decision needs to be taken to either lease or buy the mainframe computer. SOLUTION 1: As a CFO of Bonnesante Research company, by taking my colleagues opinion into consideration, I have decided to lease the mainframe computer for 18 months instead of...

    1291 Words | 4 Pages

  • Analyzing Lease vs. Buy Decision

    Analyzing Lease vs. Buy Dec To buy or not to buy is the question for many companies acquiring assets for their business. Equipment and other assets are extremely important when a company is trying to get off the ground in a new business. The chief executive officer would have to ask how would...

    1654 Words | 5 Pages

  • lease or buy

    DECISIONS TO LEASE OR BUY Main Advantage of Leasing and Buying/Purchasing Business Facility The main advantage of leasing a business facility is that your initial outlay of cash to gain the use of an asset is generally less for leasing than it is for purchasing. However, perhaps the main advantage...

    1385 Words | 4 Pages

  • Discount Rate

    Discount rate The discount rate is the interest rate that Federal Reserve Banks charge when commercial banks borrow reserves. In principle, a decrease in the discount rate encourages banks to borrow, which increases the amount of available reserves held by the banking system, which then induces an increase...

    374 Words | 1 Pages

  • Discount Rate

    1.) Discount rate: rate can get on alternative investment of the same risk. 2.) Hurdle rate: Minimum return we would require for a given risk. This is for a project (not for the firm). Hurdle rate changes with the risk of the project. 3.) Cost of capital: How easy it is to get capital? It changes...

    328 Words | 1 Pages

  • Buy or Lease?

    To Buy or to Lease? The Risk. Malaysia Airlines decision to lease whether a capital or operating rather than buying the asset arise because of the risk decision and the decision made in the upper management. When making the decision to buy or to lease the company must not only consider the financial...

    755 Words | 2 Pages

  • Discount Rate

    The discount rate Main article: Discount rate The rate used to discount future cash flows to their present values is a key variable of this process. A firm's weighted average cost of capital (after tax) is often used, but many people believe that it is appropriate to use higher discount rates to...

    498 Words | 2 Pages

  • Lessee Ltd.- Lease Case

    | Lessee Ltd.- Lease Case | | | | | | 1. Was the junior accountant’s analysis correct? Why or why not? No, the junior accountant’s analysis is not correct in classifying the lease as an operating lease in accordance with IFRS. Whether or not a lease is classified as a finance...

    954 Words | 3 Pages

  • Lease vs. Buy

    operating lease, or a capital lease. It is 2 million dollars to buy the equipment. This is too large of an amount to consider purchasing, so the options are down to the two leasing options. It is important to look at the present value when deciding between these two options. An operating lease would have...

    563 Words | 2 Pages

  • Buy/Lease and Finance

    Building An important decision to be made by Good Grocery is whether to buy or lease the space needed to expand operations into Rochester, MN. (Maynard, R) A benefit of buying a building is that you have more control (1993). If Good Grocery decides to build a brand new facility or buy an existing building...

    1246 Words | 4 Pages

  • Buy vs. Lease Scenario

    should lease a car instead of buying one. This is because I do not have money to make any down payments to buy a car, and when leasing a car it is optional to put a down payment down. This is because when you lease a car and you choose to put a down payment down, it will lower your interest rate on your...

    269 Words | 1 Pages

  • Lease or Buy a Car

    Lease vs Buy a Car? Sistema Universitario Ana G. Mendez Universidad del Turabo Lila Machado Lease vs Buy a Car? Do you want a new car every three or four years? Do you want to drive the car of your dreams? Do you want to live without worries about the car repairs, or high bills? The best option...

    551 Words | 2 Pages

  • Lease vs. Buy Analysis

    Case #34:  Lease versus Buy Analysis  Why Buy It When You Can Lease It?    David Bajak  Katrina Bishop  Gary Hsieh      Question 1:  What are the different kinds of leases available and which one would be best suited for Paulo’s restaurant?  Explain why?    There are two major types of leases: operating lease and financial lease...

    6827 Words | 18 Pages

  • Buy or Lease a Car

    Cars, trucks, vans, SUV's… almost everyone will own or lease one in their lifetime. The biggest problem is the decision whether to buy or lease the automobile. Many people are faced with this question. Buying and leasing a car both have many positive and negative attributes. The beauty of it is that...

    632 Words | 2 Pages

  • Lease vs Buy

    When purchasing a new vehicle, many consumers are faced with many choices of financing, and part for the decision that needs to be addressed is buying or leasing. In this paper we will look at the differences between buying and leasing a new automobile. Automobiles In America, cars have become a way...

    1886 Words | 5 Pages