effect lease types has on EBIT

CFA Level I
#1

OL vs CL – you know the deal – 10 seconds

#2

CL higher ebit

#3

because in OL you have rent expenses

#4

strangedays Wrote: ------------------------------------------------------- > because in OL you have rent expenses correct!

#5

aaaand with CL you have depreciation expense taken out of before EBIT, and interest expense taken out after EBIT, which is PV of lease payments * interest rate =)