To determine whether or not an operating lease should be cancelled early, the lessee should compare the:

Multiple Choice

• Number of months they have leased the asset to the number of months remaining in the lease period.

• Future value of the asset to the salvage value at the time the lease expires.

• Present value of the future lease payments to the amount already invested in the lease.

• Rate of return on the lease to their current internal financing cost.

• Present value of the future lease payments to the value they place on the asset at that point in time.