Lease Versus Purchase (This is someone strong in Finances) Must follow instructions and Rubric

The cost to purchase the CT scan is $1,300,000 at 10% (PV), with straight line depreciation over 5 years. The trade-in value $130,000 at the end of its useful life. The maintenance expense equals $12,000 annually.

The cost to lease the equipment is $26,000 per month for a period of 60 months, which includes all maintenance costs. The tables below provide the financial overview of the purchase and lease costs.

Purchase

Year	Principle Payment	Interest Payment	Maintenance Expense	Total Expense	PV Factor at 10%	PV Expense
1					0.909
2					0.826
3					0.751
4					0.683
5					0.621
Trade Value $130,000					0.621

Lease

Year	Lease Payment	PV Factor at 10%	PV Expense
1		0.909
2		0.826
3		0.751
4		0.683
5		0.621

A - 4 - Mastery

Clear and thorough discussion comparing and contrasting leasing versus purchasing. Includes multiple (at least three ) examples to support assertion

A - 4 - Mastery

Clear and thorough calculations of the figures relative to the principal payment, interest payment, maintenance expense, total expense, and PV expense.

A - 4 - Mastery

Clear and thorough explanation of the costs associated with leasing the equipment as depicted in the tables

A - 4 - Mastery

Clear and thorough explanation of the costs associated with purchasing the equipment as depicted in the tables.

A - 4 - Mastery

Clear and thorough discussion on the potential tax implications of leasing the equipment.

A - 4 - Mastery

Clear and thorough discussion on the potential tax implications of purchasing the equipment.

A - 4 - Mastery

Comprehensive recommendations for a course of action and the implications that the recommendation may have for the organization.