Introduction Everyday companies are faced with the decision of whether to lease or to buy when acquiring assets. By being able to calculate the best decision for both options, a company will be able to make the most profitable choice. However some tough questions will need to be answered like what is the expected life of the asset, what is the rate of obsolescence, and what will be the impact of the assets purchase on …
showed first 75 words of 1051 total

showed last 75 words of 1051 total
…various options and choose the lowest costing one. Factors like the nature of the assets, the tax situation, the working capital position, and the degree of leverage of a company make the situation less straightforward. The biggest advantage of buying an asset is that a business has total control over the asset. This enables the business to upgrade/modify the asset to meet its requirements better. This flexibility is not possible under a leasing arrangement.