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The report details the best way a company should go in its process to upgrade its computer equipment. In fact, any organization should opt for the most advantageous way in terms of savings and efficiency (Zimberoff, 2002). This report will weigh the option of purchasing and leasing this equipment in terms of benefits the company expects. Leasing computer equipment ought to be cheap compared to purchasing new pieces. The company will be recommended to go for the leasing option, as opposed to purchasing new equipment (Gelinas et al, 2004).
This report is based on a research carried out to establish the most viable option for the company wishing to upgrade their computer equipment (Weaver & Weston, 2007). The research was done by interviewing several dealers in computer equipment with the aim of established which a cheap option (Oz, 2008).
People in computer equipment businesses were involved whereby they were requested to give their quotations for new equipment. In addition, enterprises that lease computer equipment were consulted in order to get useful information on prices. This computer equipment may include, keyboards, mice, monitors, CPUs, printers and UPSs.
This equipment advances at a high rate hence creating the need for upgrades in the organization (Harold Bierman, 2010). It was found that leasing equipment is cheap as compared to purchasing new ones because, there are many costs involved with installation of new equipment. When the organization decides to lease this equipment for the installation, will be on the part of the owners and maintenance, as well.
Leasing computer equipment is cheap as compared to purchasing new equipment. This is because some of this equipment needs to be upgraded often due to changes in the technological world. It becomes so uneconomical for one to purchase new equipment after every six months or one year (Nevitt et al, 2011).
In case, they lease this equipment and at expiry of the lease period they are phased out by advancement in technology, then they easily change to the latest technology. The company is saved on the cost of disposing outdated equipment by opting to lease this equipment (Chandra, 2005).
In fact, by leasing computer equipment, the organization saves a lot of money in terms of maintenance cost. This is because tear and wear of the equipment are in the hands of the owners and not the organization. Depending with the agreement, the organization may lay off its technicians hence becoming abundantly economical (Kendall, 2008).
From most of the enterprises consulted on this matter, many advised that the organization should lease equipment because they keep on advancing. These advancements create the need of constant upgrading hence becoming an expensive activity for companies that have to purchase new equipment every time they have to upgrade (Hosford-Dunn, 2008).
Leasing equipment was found to have many advantages as a lot of costs are cut. This means that, for organizations dealing with constantly advancing equipment, it is extremely crucial that they arrange with dealers and attain such equipment for some time and take them back. In addition, organizations may get a chance to lay off some employees since their efforts cease to be required hence cutting down some costs.
The research data details several aspects of considerations but eventually, leasing was found to be most viable idea for the organization (Harder, 2004). This is because; it saves the organization on operational and managerial costs. Therefore, the organization should lease computer equipment hence maximizing out of the idea.
These cost analysis for an organization having leased equipment for five years.
Cost for the proposed system (figures in USD Thousands)
Benefit for the propose system
Profit = Benefits – Costs = 300, 000 -154, 000 = USD 146, 000
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Chandra, H. (2005). Fundamentals of financial management. New York: Tata McGraw-Hill.
Gelinas, U. J., Sutton, S. G., Hunton, J. E. & Hunton, J. (2004). Acquiring, developing, and implementing accounting information systems. New Jersey: Thomson/South-Western.
Harder, F. (2004). Fa$hion for profit: from design concept to apparel manufacturing … a professional’s complete guide. London: Frances Harder.
Harold Bierman, J. R. (2010). An Introduction to Accounting and Managerial Finance: A Merger of Equals. London: World Scientific.
Hosford-Dunn, H., Roeser, R. J. & Valente, M. (2008).Audiology practice management. New Zealand: Thieme.
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Nevitt, P.K., Fabozzi, F. J. & Mathew, J. V. (2011). Equipment leasing. Sydney: John Wiley and Sons.
Oz, E. (2008). Management Information Systems. Michigan: Cengage Learning.
Weaver, S. C. & Weston, J. F. (2007). Strategic financial management: applications of corporate finance. Michigan: Cengage Learning.
Zimberoff, T. (2002). Photography: Focus on Profit. London: Skyhorse Publishing Inc.