What question did this study set out to answer?

This article aims to evaluate the method for calculating the after-tax cost of leasing proposed by Thomas H. Beechy. It critiques its reliability in financial comparisons.

March 18, 2026The Accounting Review

After-Tax Cost of Leasing.

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Authors

GMG. B. MitchellThe University of Adelaide

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Implication

Analysis uncovers defects in calculating after-tax lease costs, suggesting better methods for comparison.

Key Points

This article aims to evaluate the method for calculating the after-tax cost of leasing proposed by Thomas H. Beechy. It critiques its reliability in financial comparisons.
Analyzed Beechy's method for calculating lease costs.
Identified defects in using the internal rate of return for lease interest rates.
Proposed adjustments to Beechy's calculations for better accuracy in after-tax comparisons.
Beechy's method may yield multiple or no real solutions for lease interest rates.
The implicit lease interest rate requires adjustment to match after-tax costs of debt.
Proposed a direct calculation method for deriving after-tax interest rates implicit in leases.

Cite This Study

G. B. Mitchell (1970) studied this question.

synapsesocial.com/papers/69ba43694e9516ffd37a4961 https://doi.org/10.2308/tar-4482596

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After-Tax Cost of Leasing.

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Cite This Study

After-Tax Cost of Leasing.

Discussion

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Implication

Key Points

Cite This Study

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