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In a lease versus borrow to purchase decision the appropriate discount rate, except for the salvage value, is:

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In a lease versus borrow to purchase decision the appropriate discount rate, except for the salvage value, is:

 Options:

A. the cost of capital
B. the aftertax cost of debt
C. the cost of equity capital
D. the cost of the debt

 

The Correct Answer Is:

  • B. the aftertax cost of debt

 

Conclusion

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