Types of Leases - Slides (2-4)

1. Operating Leases
2. Financial or Capital Leases
3. Sale-and-Leaseback Arrangements

Tax Consequences

Financial Statement Effects - Slide 5

Evaluation by the Lessee - Net Advantage of Leasing(NAL)

Evaluation by the Lessor

Other Issues in Lease Analysis

1. Leasing vs. Buy/Borrow
2. Leasing to preserve working capital
3. Leasing to preserve debt capacity
4. Leasing to protect against technological change

Example Spreadsheet - Chapter18.xls

1. Lessee - Net Advantage of Leasing
2. Lessor - IRR, NPV