Myths and Realities about Leasing

Abstract

Leasing—an instrument for financing investments has picked up momentum in our country in the 1980s. A number of large-sized companies has already entered the leasing scene. There are, however, a number of myths and misconceptions about leasing.

I M Pandey dispels some of these myths, clarifies the real advantages of leasing, and shows with an illustration how a lease should be evaluated. He evaluates the cash flow consequences of a lease using two methods—the Equivalent Loan and Net Advantage of Leasing.