General Studies · Lease Financing
In a lease versus buy evaluation, which discount rate is generally appropriate for the lessee to use when calculating the Net Present Value (NPV) of the financing decisions?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The lease's implicit interest rate
- 2After-tax cost of debt (or incremental borrowing rate)✓
- 3Cost of Equity
- 4Weighted Average Cost of Capital (WACC)
Correct answer
After-tax cost of debt (or incremental borrowing rate)
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