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NPV for Leased Equipment versus Purchased Equipment

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Net Present Value (NPV)
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Rick Garlick
United States

NPV for Leased Equipment versus Purchased Equipment

Do any of you use NPV for a lease situation? I lease equipment and am often asked about purchase versus lease
I do not have the customers cash inflows, but when I'd do this comparison of NPVs, the least negative of the two would be the one to go with, taking into account depreciation and taxes along with the cost they incur with a purchase or lease.
I just want to be sure I am going about this the correct way. If anyone else has something they do/use, please share. Thanks!

 

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More on Net Present Value (NPV):
Summary
Discussion Topics
topic Re-evaluating an investment decision
topic Operating Cash Flows
topic Does the Net Present Value (NPV) calculation uses cash inflows or profits?
topic Choosing between Investments Using a Comparison of NPVs
topic More Complex NPV Comparison: Interrelated Projects
topic NPV of $1 Million for a Project Means What
topic WHEN to Invest? Investing at the Right Moment...
topic Calculating NPV with Missing Data
topic Example of Net Present Calculation
topic NPV of Partial Payments
topic How do you Calculate NPV when Initial Investments are Unknown?
topic Missed Interest in NPV
topic NPV assumes Certainty of Cash Flows
topic Calculating Cost per Unit if Zero NPV without any Operating Costs Information
topic Calculating NPV for a Project
topic NPV Cost Avoidance and Savings
👀NPV for Leased Equipment versus Purchased Equipment
topic NPV with a Missing Cash Flow Figure
🔥 NPV with Only Costs & IRR
Special Interest Group

SIG Leader

Do you know a lot about Net Present Value (NPV)? Become our SIG Leader

Knowledge Center

Net Present Value (NPV)
Knowledge Center



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