Purchase Solution

Is leasing more expensive and more desirable than owning?

Not what you're looking for?

Ask Custom Question

It has been argued that leasing is almost always more expensive than borrowing and owning. Do you think this is true? Why or why not? Under what circumstances is leasing likely to be more desirable than direct ownership

Purchase this Solution

Solution Summary

This solution is comprised of detailed explanation to the following:

It has been argued that leasing is almost always more expensive than borrowing and owning. Do you think this is true? Why or why not? Under what circumstances is leasing likely to be more desirable than direct ownership

Solution Preview

It has been argued that leasing is almost always more expensive than borrowing and owning. Do you think this is true? Why or why not?

The statement above is true. In a lease, the customer must make a lease payment each year. These lease payments are fully tax deductible, so the after-tax lease payment would be a cost of leasing instead of buying. In addition, in leasing, the customer does not own the leased equipment and cannot depreciate it for tax purposes. Therefore, the customer loses the valuable tax shield of the equipment if it leases, which is a ...

Purchase this Solution


Free BrainMass Quizzes
Production and cost theory

Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.

Transformational Leadership

This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.

Cost Concepts: Analyzing Costs in Managerial Accounting

This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.

Team Development Strategies

This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.

Six Sigma for Process Improvement

A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.