Purpose: The purpose of this paper is to survey the lease vs buy coverage in leading managerial finance textbooks and to clarify the impact of tax rates and borrowing rates. Design/methodology/approach: The survey uses “plain vanilla” lease vs buy scenarios to critique and clarify...

This study evaluates the relation between a firm’s long-run cash effective tax rate (ETR) and the extent to which a corporation’s projects are tax-favored or tax-disfavored. We first derive a measure of the extent to which a project is tax-favored that is independent of the project’s...