Question:
What risks and uncertainties should be considered while making a lease vs. buy decision? How do these risks and uncertainties impact capital budgeting? What is the advantage of computing the present value of outflows in making lease vs. buy decisions? In what circumstances is a capital lease a better alternative to an operating lease? Under what circumstances is a capital lease a better alternative than buying an asset? How do qualitative factors like the condition of an asset impact a final lease or buy decision?