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A lease versus purchase analysis should compare the cost of leasing to the cost of owning, assuming that the asset purchased a. is financed with

A lease versus purchase analysis should compare the cost of leasing to the cost of owning, assuming that the asset purchased

a.

is financed with long-term debt.

b.

is financed with debt whose maturity matches the term of the lease.

c.

is financed with a mix of debt and equity based on the firm's target capital structure, i.e., at the WACC.

d.

is financed with retained earnings.

e.

is financed with short-term debt.

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