are relatively stable, the company may choose to purchase the equipment outright without resorting to financing. This may be a cash flow issue since money that is used to purchase a high-priced asset such as a building is money that cannot be used for other activities in the organization ("Leasing," 2005).
Cash flow is one of the primary reasons that companies may choose to lease rather than purchase, as well. Under a lease, the company does not need to make a large payment as it would in an outright purchase, nor does the company make interest payments as it would when paying back a loan. Instead, the company pays a predetermined amount of money for a predetermined amount of time for the use and benefit of a particular asset. Of course, the company does not have the right to modify the assetùin most casesùnor does the asset become the property of the company at the end of the lease, unless it is purchased. The stable cash outlay can provide the company with good information for its cash flow pu
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