Munich Personal RePEc Archive

Relation between lease finance and purchase

Mohajan, Haradhan (2012): Relation between lease finance and purchase. Published in: International Journal of Economics and Research , Vol. 3, No. 3 (10 June 2013): pp. 146-158.

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This paper discusses the long-term financial lease contracts with lease evaluation. Here a comparatively simple and straightforward solution of neutralizing the risk of lease financing is explained. The lease is a contract between the owner and the user of assets for a certain period during which the second party uses an asset in exchange of making periodic rental payments to the first party without purchasing it. In the long-term lease contract the lessee (the user of assets) is generally given an option to buy or renew the lease. An attempt has been taken here to investigate the buy or lease decision of an asset of a competitive firm.

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