Learning Outcomes: In this sub-chapter, you will learn how to:
- Calculate the present value of a lease.
- Depreciate and Amortize the Lease Asset and Lease Obligation (liability).
- Explore the effect of different rates of depreciation and amortization on the firm’s Equity.
- Consider the benefits and disadvantages of a lease.
- Examine and Identify a firm’s optimal long-term financing option.
- Recognize the place of a Financing (“Capital”) Lease within a firm’s overall Capital Structure decision-making.