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FINANCIAL LEASE ANALYSIS: CONSISTENT AND INCONSISTENT APPROACHES
Author(s) -
Howard Peter
Publication year - 1983
Publication title -
accounting and finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.645
H-Index - 49
eISSN - 1467-629X
pISSN - 0810-5391
DOI - 10.1111/j.1467-629x.1983.tb00042.x
Subject(s) - lease , equity (law) , finance , debt , business , purchasing , promotion (chess) , actuarial science , economics , marketing , political science , law , politics
This paper evaluates lease‐purchase analysis methods which assume that leasing provides 100 percent financing and that purchasing involves a mixture of debt and equity finance. Such analyses are being used in Australia particularly in the promotion of leveraged leasing. It is argued that this method is unsound and that analysis of financial leasing should focus on the effects of leasing on the financial risk of the lessee.