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Lease vs Buy: The Automobile

Sometimes the management accountant must assist management in determining when to buy or to lease a piece of equipment, for example, an automobile or a fleet of autos. One useful article that can be used as a guide for these decisions was published recently in the Journal of Accountancy (http://www.aicpa.org/pubs/jofa/apr1999/burgess.htm).

Required: Review the article and answer each of the following questions in 100 words or less.
  1. What are the four key factors in a leasing decision? How sensitive is the leasing decision to each of the four factors? What are some of the important factors?
  2. What are some of the tools the management accountant can use in making the lease/buy decision? Can you find additional tools on the web?
  3. What, if any, ideas do you think the article missed and should have included in providing advice regarding the lease vs. buy decision?





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