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Lease rentals

This topic has 1 reply, 2 voices, and was last updated 12 years ago by John Moffat.

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October 17, 2012 at 6:30 am #54734
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
October 17, 2012 at 12:54 pm #105625
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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