Net Advantage To Leasing (NAL)
The total monetary savings that would result from a person or a business choosing to lease an asset, as opposed to purchase it outright. The benefit of leasing is determined by comparing the net present value of purchasing the asset outright to the net present value of leasing it. Investopedia Says:
Depending on the level of detail necessary in the calculation, NAL present value calculations can take into account depreciation, the average expected life of the asset, cost of repairs to the asset, expectations of interest rate changes and so on. In simplistic cases, NAL is expressed as the money that would be saved by leasing an asset instead of buying it, not taking into account the cost of capital. Related Terms:
Depreciation
Lease
Net Present Value - NPV
Present Value - PV
Weighted Average Cost of Capital - WACC |