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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › Lease vs buy
Which of the following is potentially a benefit to the lessee if they lease as opposed to buy?
? Avoiding tax exhaustion
? Attracting lease customers that may not have been otherwise possible
? Exploiting a low cost of capital
? Potential future scrap proceeds
Dear sir,
For option C, they have said exploiting a low cost of capital is a potential benefit to purchaser, not the lessee
Can u pls explain how?
Thank you
Buying involves borrowing a large amount of money at the start of the investment, and the lower the cost of money (i.e. cost of capital) is then the more attractive it is to buy.