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You are considering whether to buy or lease a machine for your heavy engineering plant. How will the duration of the project influence your decision?
• If you buy, the cost is $,, and the one-time cost of procurement and integrating in your company is $1, • If you lease, you have to pay $, as down payment and $5, per month
Answer: If you buy, cost is: $, + $1, = $, Assuming the lease is for M months, the cost is: $, + $5, x M
The cost of buy = cost of lease, if : $, = $, + $5, x M M =,/5, = four months
So, if the duration of the project is less than four months, you should lease—otherwise, you should buy.
International trainer ENG . Hassan Shalaby
Thanks for the invitation. Useful Information.
Thank you for the invitation and sharing the information.
Thanks for good information ----------------------
Thanks for the invitation,i would go for lease if the our need not more then four months,
Thank you for your invitation & necessary information.
Thank you for the invitation
Each greeting to everyone on the benefit and enrichment of informational
The lease or buy decision may seem to be a simple straight forwards question which can be answered based on simple mathematical calculation.
However, it may not be that straight forward - the calculations may show it is better to buy than lease but you may still lease it because you may not the the liquidity and low borrowing power.
and in contrast if lease is mathematically correct you may still buy the machine not based on current project in hand but based on future project prospects and also with a back-up plan to lease it out after the project.
So the parameters of consideration are wider.
Thanks for the valuable information and useful
