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Lease vs. Buy (Equipment/Real Estate)

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Table of Contents
Lease Vs. Buy Laid in Excel Spreadsheet1
Advantages to Lease Vs. Buy 2
Advantages of Using a Longer Time Table Rather Than Shorter 3
Real Estate Depreciation 4
Works Cited………………………………………………………………………………………………………………………………….……….5

Excel Spreadsheet Showing Table and Work.

Advantages of Lease Vs. Buy The decision to lease or buy equipment or real estate is very important one. One of the most obvious draw backs to leasing versus buying is that, at the end of the lease, the organization does not own the equipment or real estate. The primary advantage to leasing is that it conserves cash for other business operations. Additionally, leasing allows the organization to expense some of the maintanence costs and provides superior tax benefits. Leasing allows for the organization to more efficiently keep up with technology advantages. In reference to real estate, the lease offers the option to change locations if necessary. Moreover, many of the maintenance costs fall on the owner and not the leaser.
(Park, 2011)

Advantages of Using a Longer Time Table Rather Than Shorter Particularly with real estate investments, a longer period than the four years used in this scenario might prove to be more accurate. While the real estate market is not particularly good now, a change in that area might make the initial investment actually have returns. The cyclical nature of this particular market may contribute to a more favorable outcome in the lease versus buy examination. (Genesove, 2007) (Ghanbari Parsa, 2009)

Real Estate Depreciation While real estate is generally concidered a sound investment, the recent crash of the real estate market coupled with the added risks of commercial real estate add more variables to consider when evaluating a lease versus buy situation. If the company has had sufficient success to assume that it will own the

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