can anybody tell me...??? in leasing why wu use cost of debt to find out the net advantage of leasing......????
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Financial management
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Mayuri. @
Cost of Debt is used to find PV of Lease Rentals and not cost of capital since we have to find the benefit of leasing instead of borrowing. We use PV of lease rentals as the amount that will be borrowed, so as to compare the costs/benefits on same footing.
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