Answer / Kavita Gupta

Yes, leasing can increase a firm's borrowing capacity. This is because leases are considered off-balance sheet items, meaning they do not appear on the balance sheet as debt.nLeasing allows companies to obtain assets (such as equipment or real estate) without taking on additional debt that would otherwise reduce their borrowing capacity. However, it's important to note that leases can still have financial implications and impact a company's cash flow.

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