Operating leases increase interest expense in the income statement, while decreasing net cash flows in the cash flow statement, compared with capital leases.

Name: Operating leases increase interest expense in the income statement, while decreasing net cash flows in the cash flow statement, compared with capital leases.
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Operating leases record rent expense, rather than interest and depreciation. Further, the lease payments (e.g., cash outflows) are the same, whether or not the lease is capitalized.

Operating Leases Increase Interest Expense in the Income Statement, While