Leasing vs Purchasing

5543 Words Aug 28th, 2012 23 Pages
Report on Leasing vs. Purchasing The benefits of leasing Computer equipment vs. purchasing

Summary
The company needs to upgrade its computer equipment. There are two upgrade paths to consider. In this proposal, we demonstrate how equipment leases take advantage of the benefits of reduced depreciation and taxation, easy scalability, reduction of IT staff usage, reduced energy costs, and reduction of capital spending. The company can free up money overall and maintain better control of the IT budget by leasing. The cost of equipment is spread out over a 3-year period by leasing. There are no disposal fees because the leasing company will be responsible for the equipment leased. By replacing the current sever setup ( the
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We would like to prevent this by presenting a way to reduce expenses. “…leasing can provide financing – in some cases up to 100% of the acquisition cost – when bank credit is scarce. And turnkey leasing programs roll the acquisition, maintenance, upgrading and reselling of equipment into one package.” [ (Couretas, 1997) ]
Leasing and Financing Programs in Q3 fig 3
Leasing and Financing fig3

[ (PC Mall Leasing Options, 2009) ]
The proposal is to lease the IT equipment using one of the companies in the illustration fig 3. We have spoken to the customer account representatives of the leasing companies. They are all very eager to schedule a consultation meeting with upper management and the IT department heads. [ (Leasing can help manage changing technology, 1997) ]
Computer technology evolves rapidly. There is a distinct advancement year to year. Computers handle more processing power, use less energy, and depreciate like rocks falling off Pike’s Peak. Leasing helps prevent obsolescence. It offers an opportunity to upgrade equipment for a fraction of the cost of purchasing. With better equipment, the company stays ahead of the IT curve and improves on productivity from all departments that utilize the in house private network. IT equipment has an expected useful life of five to eight years.
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