HOW TO BUY, RENT OR LEASE THE TOOLS OF CONSTRUCTION
A contractor has many equipment acquisition choices. Cash purchases, various installment plans, rental plans, and a number of different leases and loans are available to contractors who want to get equipment. In total dollars spent, the least costly equipment financing method is the cash purchase; the most expensive is renting. In addition to outlining these choices, this article presents other costs to consider; costs imposed by missed tax deferrals and deductions, costs of lost profits from work missed due to lack of funds or bonding capacity, and costs of lost dollar value because of inflation. Cash-flow analysis is the best procedure for evaluating long term costs of alternative methods. Tables included here show a present value analysis (PVA) of cash flows for four hypothetical alternatives for acquiring equipment: a cash purchase, an installment purchase, a bank term loan, and a true lease.
McGraw-Hill, Incorporated330 West 42nd Street
New York, NY United States 10036
- Publication Date: 1975-2
- Pagination: 12 p.
- Construction Methods and Equipment
- Volume: 57
- Issue Number: 2
- Publisher: McGraw-Hill, Incorporated
- TRT Terms: Benefit cost analysis; Cash flow; Construction equipment; Costs; Leasing; Purchasing; Tools
- Subject Areas: Finance; Freight Transportation; Highways; Vehicles and Equipment;
- Accession Number: 00082839
- Record Type: Publication
- Files: TRIS
- Created Date: Mar 26 1975 12:00AM