Description
The purpose of this assignment is to explain core concepts related to lease vs. purchase and tactical financial decisions.
Read the Chapter 19 Mini Case on pages 796-797 in Financial Management: Theory and Practice. Using complete sentences and academic vocabulary, please answer questions a through f.
APA format is not required, but solid academic writing is expected.
This assignment uses a rubric. Please review the rubric prior to beginning the assignment to become familiar with the expectations for successful completion.
You are not required to submit this assignment to Turnitin.
Mini Case 8
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unformatted Attachment Preview
Purchase answer to see full attachment
Explanation & Answer
Hello! I have uploaded the answer to this question below. Please have a look at it and
get back to me in case of anything. Thank you.
Running head: LEASE VERSUS PURCHASE DECISION
Lease versus Purchase Decision
Name
Institution
Date
1
LEASE VERSUS PURCHASE DECISION
2
Introduction
Before an organization buys equipment, it has to consider many factors. One of the primary
factors is to either lease them or buy them. The two options have advantages and disadvantages
depending on the exact situation of the company (Brigham & Ehrhardt, 2013). Leasing involves
the application of capital budgeting concept to decide if leasing is a better option than buying. For
a company to make a good decision in any given situation factors like financial options for
purchase versus leasing should be considered. If cash involved is little, leasing is the best option
because the monthly payments are usually smaller compared to buying. The paper provides a brief
discussion on leasing versus purchase decision.
a. Parties Involved in a Lease Transaction
The two parties involved in leasing are lessor and lessee. A lesser is any person or company
authorized to perform leasing issues. In this case, the leaser is the equipment manufacturer Lewis
securities contacted. A lessee, on the other hand, is any person who obtains the rights to make use
of the leased assets and is supposed to pay a specified fee b...