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Buy versus Lease

In: An Introduction To Accounting And Managerial Finance A Merger of Equals


  • Harold Bierman

    (Cornell University, USA)


AbstractThe following sections are included:FAS13: Accounting for LeasesExample of Accounting for LeasesLessors and LesseesThe Pros and Cons of LeasingThree Basic ProblemsSeparating Financing and InvestmentThe Problem Even with a Zero-Tax SituationExample 12.1: Buy-Borrow versus LeaseThe AssumptionsThe ProblemThe AnalysisThe DecisionExample 12.2: Acquire the New Equipment?The ProblemThe AnalysisThe DecisionThe Proper ComparisonA Lease Is a DebtThe Effect of TaxesA Method of SolutionRisk-Adjusted Discount RateDebt Calculations Using 0.20Residual ValueThe IssuesThree DecisionsConclusionReview ProblemsQuestions and Problems

Suggested Citation

  • Harold Bierman, 2010. "Buy versus Lease," World Scientific Book Chapters,in: An Introduction To Accounting And Managerial Finance A Merger of Equals, chapter 12, pages 223-245 World Scientific Publishing Co. Pte. Ltd..
  • Handle: RePEc:wsi:wschap:9789814273831_0012

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    More about this item


    Accounting; Finance; Mergers and Acquisitions; Managerial Finance;

    JEL classification:

    • M4 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance


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