Cover of: Making the lease/buy decision | Robert E. Pritchard

Making the lease/buy decision

a guide to leasing under the Economic Recovery Tax Act of 1981 and the Tax Equity and Fiscal Responsibility Act of 1982
  • 355 Pages
  • 3.69 MB
  • 3214 Downloads
  • English
by
American Management Associations , New York, N.Y
Industrial equipment leases -- Taxation -- United States., Lease and rental services -- Law and legislation -- United States., Business enterprises -- Taxation -- Law and legislation -- United States., Leases -- Taxation -- United States., Lease or buy decis

Places

United St

StatementRobert E. Pritchard and Thomas J. Hindelang.
ContributionsHindelang, Thomas J., Pritchard, Robert E., 1941-
Classifications
LC ClassificationsKF6428.L3 P74 1984
The Physical Object
Paginationix, 355 p. :
ID Numbers
Open LibraryOL3186109M
ISBN 100814457533
LC Control Number83045213

Libraries serving those businesses should have on hand at least one or two current books that discuss the factors involved in the lease-or-buy decision-making process, the two primary considerations being the accounting implications and the tax by: Therefore, making the right decisions on how you acquire equipment is more important than ever.

This starts with a basic framework for deciding whether to own or lease. When you lease, you pay only for the use of the equipment over a specific period of time and can decide at end of lease to acquire more current technology.

Get this from a library. Making the lease/buy decision: a guide to leasing under the Economic Recovery Tax Act of and the Tax Equity and Fiscal Responsibility Act of [Robert E Pritchard; Thomas J Hindelang]. lease scenario against the buy scenario.

To make the best decision, the discounted cash flows for each scenario should be compared, usually adjusted for the effect of income taxes. Discounted cash flow analysis produces an all-in cost-of-funds comparison of leasing versus buying. In order to make File Size: 1MB.

The decision to lease or buy an asset is an issue that business owners and individuals are faced with all the time. There are many things to consider when contemplating whether to lease or buy, be it equipment, vehicles or something else.

The lease terms for each of these lease types will impact the ultimate net cost of the lease. Choosing the Best Lease. In addition to finding a lessor, probably the biggest decision a fleet will have to make is whether to go with a closed-end lease or an open-end lease. A make-or-buy decision is an act of choosing between manufacturing a product in-house or purchasing it from an external supplier.

Make-or-buy decisions, like. If your lease buyout price is lower than the car’s market value, buying your leased car is like getting a discount on a good used car.

Estimating what a car will be worth 24 to 48 months down the road is more of an art than a science. The book includes great repeatable processes that can be used to make a decision. Read more. Helpful. Comment Report abuse. Yann Le Bihan. out of 5 stars Pragmatic book about a complex subject.

Reviewed in the United States on January 7, Verified s:   If you’re considering a lease buyout, you have some thinking — and math — to do before making your decision. Depending on your contract, you may be able to purchase your leased car for the buyout price — which should be noted in your contract — by the time or before the contract is up.

This guide describes various aspects of the lease/buy decision. It lists advantages and disadvantages of leas ing and provides a format for comparing costs of the options. Go to Top. What Is a Lease. A lease is a long term agreement to rent equipment, land, buildings, or any other asset.

A lease-buy decision therefore, is financing decision and involves a choice between debt financing and lease financing. Another point worth noting about a lease-buy decision is that the firm should compare leasing to borrowing the amount of purchase price and then buying the asset (rather than using equity to buy the asset).

buy or lease decision is more than a financial decision. This “Instructor’s Notebook” focuses on the analytical framework for making this decision. Although there are many variations, the buy or lease decision typically arises in the following cir-cumstances: 1. Factors to Consider When Making the Lease or Buy Decision.

What factors should you consider when deciding whether you should buy or lease a business facility.

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The following factors, if relevant to your situation, may lead you to conclude that you should purchase, rather than lease, your business facility: You want control of the property.

The following tables demonstrate how you can use a cash flow analysis to assist you with a lease-or-buy decision. In this case, if cost were the sole criterion for the decision, you would be inclined to purchase the asset because in current dollars, the cost of purchasing is.

Each situation is unique and the decision to buy or lease depends on each case. Lease vs. Buy 2 Your Resource for Safer Fields • Brought to you by the Sports Turf Managers Association and its charitable Foundation, The SAFE Foundation • ph.

•   5 Factors in the Buy-or-Lease Decision More While I'm out on vacation this week, we're re-posting some of our favorite stories from the story was originally posted on Ma LEASE OR BUY DECISIONS.

Assets may purchased or taken on lease. Apart from tax angle other factors also are important in taking lease or buy decisions like rate of change in technology. Advantages when Assets are taken on Lease: Lease Rental can be claimed as deduction as revenue expenditure.

However Depreciation cannot be claimed since assets. Equipment financing: Making the lease vs. buy decision Jeremy Douberly, May 8, One of the central decisions a financial manager must make when acquiring business equipment is whether to lease the equipment or buy it (typically with loan financing).

Get this from a library. Lease or buy?: principles for sound decision making.

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[James S Schallheim] -- Schallheim begins by exploring the fundamental reasons for considering a lease arrangement over a purchase, noting foremost that equipment leasing provides customized financing with important tax. Provides real estate market data for the analysis of an office lease or buy decision.

Demonstrates what is known as the "leasing puzzle"--the answer simply being that the two forms of financing are not cost equivalent in the presence of capital market imperfections, despite both being credit forms. Sometimes, the right decision is hard to come to, so a lease vs buy calculator is helpful in making the right choice.

Below are some advantages to both leasing and buying. Benefits of leasing. There are many reasons why companies decide to lease items rather than buy them.

Hospitals face the decision of leasing or buying equipment on a regular basis. Ultimately, whether to lease or buy comes down to a hospital’s objectives.

At Edward-Elmhurst Healthcare in Elmhurst, Ill., a leased piece of equipment is a relative rarity. There are some factors and variables, both qualitative and quantitative, that affects a person or firm’s decision either to buy or lease an asset. It is imperative as a lessee (user of an asset) to critically analyse these issues to arrive at a better decision.

The following are some of the qualitative factors that imply an obvious advantage of leasing over buying an asset. (1) Flexibility. The total cost associated with the lease or purchase is generally a major factor in decision making.

While lease payments include an interest factor, they will still typically be less than those to finance the purchase of a vehicle. Thus, the business owner may be able to afford a higher-end car.

Finances Related to Rent vs. Buy. The first step in the decision-making process is to determine whether you can afford to purchase a home. Issues to consider include your ability to make. A customer’s decision whether to lease or to buy equipment should involve much more than simply crunching numbers.

When presented with the option of whether to lease or purchase a piece of equipment many customers turn to their accountants, who in turn apply a fairly standard lease/purchase analysis to the transaction.

Deciding whether to lease as opposed to buying capital equipment requires some analysis and determination of what the overall goals are for the business and for using the capital equipment. Relying solely on the recommendations of the person selling the capital equipment is a mistake, because salespeople are often.

Here are the advantages of each, plus some decision-making tips. Leasing. The advantages of leasing include: It’s a much smaller cash outlay to lease computers and other machines than to buy them. Leasing gives you a trial period to determine whether the equipment is the right fit for the business.

A maintenance contract may be included in. The decision to lease or buy a vehicle or piece of equipment is usually based on an analysis of the company’s cost of capital, the company’s cash flow and the time value of money. Facing A Decision. Let’s assume you are faced with the following lease-or-buy decision.

W 9 WORKSHEET Worksheet for the Lease versus Purchase Decision Cost of Purchasing a. Agreed-upon purchase price $48, b. Down payment $4, c. Total loan payments (monthly loan payment $ x 72___ no.

months) $48, d.This publication describes various aspects of the lease/ buy decision. It lists advantages and disadvantages of leasing and provides a format for comparing costs of the options.

Description Making the lease/buy decision FB2

What Is a Lease? A lease is a long term agreement to rent equipment, land, buildings, or any other asset. In return for.Lease vs. Buy Analysis Leasing information technology solutions is rapidly becoming the preferred program for a number of organizations, ranging in both size and industry.

There are a number of individual criteria that must be considered before choosing how .