Which of the following must be considered when making a lease-versus-purchase decision?
A) the before-tax cash outflows for each year under the lease alternative
B) the before-tax cash outflows for each year under the purchase alternative
C) the after-tax cash outflows for each year under the lease alternative
D) the depreciation expense under the lease

Question

Quizplus · Accepted Answer

The after-tax cash outflows for each year under the lease alternative must be considered because taxes affect the actual cost of leasing, and the decision should be based on the net cash flow impact.

Which of the Following Must Be Considered When Making a Lease-Versus-Purchase