In the Lease-Versus-Buy Decision,leasing Is Often Preferable

Multiple Choice

In the lease-versus-buy decision,leasing is often preferable

A) because it has no effect on the firm's ability to borrow to make other investments.
B) because a down payment is generally not required and there are no indirect interest costs.
C) because lease obligations do not affect the firm's risk as seen by investors.
D) because the lessee owns the property at the end of the lease term.
E) because the lessee may have greater flexibility in abandoning the project in which the leased property is used than if the lessee bought and owned the asset.