Which of the following statements about using the Net Present Value of the cost of leasing todetermine whether to lease or to purchase an asset is correct?
A) If the Net Present Value of the cost of leasing is positive the asset should purchased
B) If the Net Present Value of the cost of leasing is negative the asset should purchased
C) If the Net Present Value of the cost of leasing is zero the asset should leased
D) If the Net Present Value of the cost of leasing is zero the asset should purchased

Question

Quizplus · Accepted Answer

If the Net Present Value of the cost of leasing is positive, it means that the present value of the lease payments is greater than the present value of the purchase price. This means that it is more expensive to lease the asset than to purchase it, so the asset should be purchased.

Which of the Following Statements About Using the Net Present