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Lease vs Buy Decision

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Describe how the lease verses buy analysis is conducted.

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Solution Summary

This solution discusses a lease vs. buy decision.

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There are four points in conducting the whether a lease option is better than a buy option.

1. Marginal tax rate- First look if the lessee is tax exempt and therefore this would not really be a factor and you could move down to number 2. However, if the tax is pretty high for the individual or entity leasing, you need to calculate if in time the tax would outweigh the actual cost at some point and that is when you start thinking of buying instead of leasing.

2. The interest of capital if it was to be borrowed to pay for the product ...

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