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Question

From the point of view of the lessee, a lease is a:

A
Working capital decision
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B
Financing decision
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C
Buy or make decision
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D
Investment decision
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Solution

The correct option is B Financing decision
Lease is a financing decision because investment is something from where you are will get back some returns in future. In leasing there is no return rather lessee is paying lease rentals per month. Moreover, lessee gets immediate access to the assets. It has tax benefits.

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