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This spreadsheet presentation explains the financial analysis involved in the decision to lease or buy equipment. The lessee is the party borrowing the equipment, and the lessor is the lending party transferring the equipment. This decision is a financing one, considering if it is cheaper to take out a loan to buy the equipment or lease it. Leasing is an alternative to borrowing, as it avoids paying interest charges. Ultimately, the decision hinges on which financing option is more cost-effective for the firm.