Lease-Buy Simulation

Paper Summary:

The decision to lease equipment as opposed to buying it outright is a complex decision with benefits to both considerations. For companies that have a limited amount of capital or are constrained in their access to capital sources, leasing is the better option. For companies that have no capital issues and that are purchasing equipment that has a long life span, buying the equipment is the best option because the returns on the investment cover a longer period. This paper examines the positives and negatives of buying equipment and leasing equipment and discusses which option is best for different financial situations.

From the Paper:

"Yet, there are considerations in both cases that might make the obvious choice the second option rather than the first depending on the individual conditions of each business. In very essential terms, leasing equipment and other capital investments preserves a company's capital position and allows the company to upgrade more often or to retool more rapidly and with less cost (Neely)."

More papers on Lease-Buy Simulation:

• Case Study # 94504 : "Analyzing Lease Vs Buy Decisions"
• Analytical Essay # 123671 : "Lease Versus Buy Decisions"
• Case Study # 96162 : "To Buy or Lease?"

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