FINANCE

Net Advantage to Leasing



Net Advantage to Leasing

Question

Calculate the net advantage to leasing assuming zero residual value. Should the firm lease the computer system? Calculate the net advantage to leasing assuming $ 500,000 residual value. Should the firm lease the computer system?

Solution

Net Advantage to Leasing (NAL)

The lease vs buy decision involves many factors including the financial analysis to determine the net advantage to leasing. Overall the lease vs buy decision hinges on a decision of owning or not owning the asset and a decision on how to finance the asset acquisition. Net advantage to leasing (NAL) is a standard ...