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If a Lease Analysis Shows Exactly the Same Present Value

Question 1

Multiple Choice

If a lease analysis shows exactly the same present value as an equivalent loan, the lessee should:


A) choose to lease or buy based on other criteria.
B) lease, since there are more tax shelters.
C) buy, because the salvage might be bigger than estimated.
D) neither lease nor buy, since the asset choice is clearly wrong.

Correct Answer:

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