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IT Project Management: Should your company buy the equipment or lease it?

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Suppose your company is trying to decide whether it should buy special equipment to prepare some of its high-quality publications itself or lease the equipment from another company. Suppose leasing the equipment cost $240 per day. If you decide to purchase the equipment, the initial investment is $6,800, and operations will cost $70 per day. After how many days will the lease cost be the same as the purchase cost for the equipment? Assume your company would only use this equipment for 30 days. Should your company buy the equipment or lease it?

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Solution Summary

This solution provides calculations and answers for the total cost to the company of the purchase and lease decision and an interpretation of the results.

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Suppose the company uses the equipment for x days.
If the company buys the equipment, the total cost is 6800 + 70x.
If the company leases ...

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