Assessment briefScenarioHaving recently graduated you are employed as a trainee accountant in the financedepartment of a large organisation. The Director of Finance has asked for a reportconsidering asset investment decisions and capital rationing: the company is considering amajor capital investment decision, a replacement of its fleet vehicles and the DOF wantsto see any advantages of purchasing over leasing capital assets by the organisation in theenvironment of risk and uncertainty caused by Brexit.Requirement: Write a report using examples considering the evaluation of the choicebetween borrowing to purchase and leasing an asset. Your report should consider thefollowing aspects of investment appraisal. How might the before and after tax costs ofdebt affect the debt decision? How might the decision be considered in an environmentwhere capital availability is limited? What factors should be considered in making a capitalinvestment in an environment of risk and uncertainty?
