Net advantage to leasing

Net advantage to leasing

The net present value of entering into a lease financing arrangement rather than borrowing the necessary funds and buying the asset.

Net Advantage to Leasing

The difference between the cost of leasing an asset and the cost of borrowing funds to buy it, where the cost of leasing is less. When calculating whether there is a net advantage to leasing, one takes into account the present value of the funds, the cost of capital, the useful life and depreciation, and so forth.
References in periodicals archive ?
All of the five texts recommend NPV of leasing (or net advantage to leasing) as a method of comparing the two financial alternatives.
The question regarding the feedback effect was: "Under what circumstances would a project that has been rejected at the capital budgeting stage be accepted based on Net Advantage to Leasing?" A situation making a negative NPV project a worthwhile investment may occur when a favorable lease term is available only with this project.
The analysis procedure is referred to as the Net Advantage to Leasing (NAL).