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Dirt Bikes USA: A Case Study

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 You hold the power concerning maintenance. When renting, the leasing firm determines how the equipment is maintained and when. If the equipment is bought outright, the purchasing company determines its schedule for maintenance. Once equipment in purchased, there are no further financial obligations between the buyer and seller.
 In terms of hardware, equipment is deductible. According to Section 179 of the IRS code, during year one, companies are able to deduct the cost of newly purchased assets in its entirety, including computer equipment.
Purchasing: The Disadvantages
 The initial outlay for required equipment is expensive. Dirt Bikes USA would have to pay $4,000 to purchase the server to run the software, and would have to pay a licenses fee of $100,000 up front. The company could instead use that money elsewhere to grow their business by marketing and advertising.
 Ultimately, equipment becomes out-of-date. …show more content…

Carey, “some studies have indicated that by leasing an application from an ASP, customers save between 33% and 53% over purchasing and managing the hardware and software for the application themselves.” Taking these statistical figures into consideration with the data collected by Dirt Bikes USA, it is best for the company to lease its application services from a reputable provider like Microsoft for around $209,500.00, rather than purchase it for $318,999.50. Dirt Bikes USA will not have to worry about the up keep of its software or the fact that with new technology emerging every day, devices become obsolete in no time. As stated by Moore’s Law, every 18 months technology doubles. Microsoft will take on the heavy lifting on behalf of the company by keeping the software up-to-date, safeguarding sensitive files by use of intensive firewalls, and providing 24/7 customer support. All in all, ASPs deliver increased security, reliability and manageability, while lowering the total cost of ownership of an IT system to the

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