Lease rentals

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    anna263
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    How to calculate the highest lease rentals that a company would accept ?
    I don’t understand this : PV of lease CF= PV of Purchase CF


    Avatar of John Moffat
    John Moffat
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    If the PV of the lease flows was less than the PV of the purchasing flows, then it would be cheaper to lease, If the PV of the lease flows was more then it would be cheaper to buy.
    So the highest lease payments worth paying would be when the PV’s were equal.

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