Question: Which statement is correct? When computing the NAL using the cost of debt is recommended because this is consistent with how we have conducted capital

Which statement is correct?

When computing the NAL using the cost of debt is recommended because this is consistent with how we have conducted capital budgeting analysis by assigning specific financing costs.

The NAL will be bigger if the cost of debt is used.

The NAL will be bigger if the WACC is used.

The biggest cost benefit to leasing is recovery of the salvage value.

As it pertains to leasing, the irrelevancy result implies that whether you use the cost of debt or the WACC as the discount rate, it will not matter.

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