In some instances, a company might be able to lease assets at a cost less than the cost the firm would incur if it financed the purchase with a loan....

. In some instances, a company might be able to lease assets at a cost less than the cost thefirm would incur if it financed the purchase with a loan. If the equipment represented a sig-nificant addition to the lessee’s assets, could this affect its overall cost of capital, and thusthe capital budgeting decision that preceded the lease analysis? Might this affect capital budgetingdecisions related to other assets? Explain