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AAFM Exam CTEP Topic 3 Question 26 Discussion

Actual exam question for AAFM's CTEP exam
Question #: 26
Topic #: 3
[All CTEP Questions]

If the NPV of buy alternative is Positive and the NPV of incremental lease effect is negative then the correct decision is to___________.

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Suggested Answer: C

by Rhea at Aug 06, 2023, 09:55 PM

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Lynda
4 days ago
Hmm, let me think... If the NPV of buying is positive and the NPV of leasing is negative, then it's a no-brainer. Lease the asset? Yeah, right, that doesn't make any sense. Option B is the way to go!
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Alaine
8 days ago
If the NPV of buying is positive and the NPV of leasing is negative, then the obvious choice is to buy the asset. Option B is the correct answer here.
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Stanford
16 days ago
That's a good point. If the sum is positive, then leasing might be a better option.
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Alyce
17 days ago
But what if the sum of the two NPVs is positive? Shouldn't we lease the asset then?
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Stanford
24 days ago
I think the correct decision is to buy the asset.
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