Assertion (A):Firms opt buying an asset if the equivalent annual cost of ownership and

operation is less than the best lease rate it can get .

Reason (R): Operating leases are attractive to equipment users if the lease payment is less than

the user’s equivalent annual cost of buying the equipment.

In the light of the above statements, choose the correct answer from the option given below:

  • A

    Both (A) and (R) are true and (R) is the correct explanation of (A)

  • B

    Both (A) and (R) are true but (R) is NOT the correct explanation of (A)

  • C

    (A) is true but (R) is not correct

  • D

    (A) is false but (R) is correct