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.
Answer: B
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