FIN 370 Week 4 TEAM Paper 1 
Purchase vs. Lease
Thomas Belton, Dean Wilhelm, Ernest Williams, Luis Franco
Finance for Business FIN/370
01/26/2015
Rodney Nelsestuen
Purchase vs. Lease
According to “Lease Agreement (2014), a lease “is a contract between a lessor and lessee that allows the lessee rights to the use of a property owned or managed by the lessor for a period of time. The mutual agreement between two parties does not give ownership rights to the lessee, though the owner or lessor can at times allow special allowances to change the existing contract or terms that meets the needs of the person who is leasing the property. During the lease period, the lessee is responsible for the condition of the property” (Lease Agreement, 2014).
“Buying vs. Leasing” (2014) says that advantages of leasing products and equipment include fewer starting expenses. The main object that is attractive to those in the leasing areas of operation is that it can help you obtain an asset with lower starting expenditures. This is evident is because the leases for equipment usually do not require any sort of a down payment and this helps the lessee get the goods without depleting the levels of the cash flow that are currently established (“Buying vs. Leasing”, 2014). Lease payments on a monthly basis are typically less than a traditional principal and interest payment. Leases are normally easier to acquire due to the fact that terms can be changed and are more attractive rather than long term loans for financing. Leasing may be a solution if you don’t have the greatest credit or have cash flow issues and need a lower payment or no down payment. If you are utilizing the lease to gain products that could be antiquated in a short period, like technology equipment such as computers, the lease will then pass on the weight of obsolescence to the lessor. Once the term agreement for a previous lease expires then a lessee will be able to upgrade at any time.
A well-known advantage of being involved with
Thomas Belton, Dean Wilhelm, Ernest Williams, Luis Franco
Finance for Business FIN/370
01/26/2015
Rodney Nelsestuen
Purchase vs. Lease
According to “Lease Agreement (2014), a lease “is a contract between a lessor and lessee that allows the lessee rights to the use of a property owned or managed by the lessor for a period of time. The mutual agreement between two parties does not give ownership rights to the lessee, though the owner or lessor can at times allow special allowances to change the existing contract or terms that meets the needs of the person who is leasing the property. During the lease period, the lessee is responsible for the condition of the property” (Lease Agreement, 2014).
“Buying vs. Leasing” (2014) says that advantages of leasing products and equipment include fewer starting expenses. The main object that is attractive to those in the leasing areas of operation is that it can help you obtain an asset with lower starting expenditures. This is evident is because the leases for equipment usually do not require any sort of a down payment and this helps the lessee get the goods without depleting the levels of the cash flow that are currently established (“Buying vs. Leasing”, 2014). Lease payments on a monthly basis are typically less than a traditional principal and interest payment. Leases are normally easier to acquire due to the fact that terms can be changed and are more attractive rather than long term loans for financing. Leasing may be a solution if you don’t have the greatest credit or have cash flow issues and need a lower payment or no down payment. If you are utilizing the lease to gain products that could be antiquated in a short period, like technology equipment such as computers, the lease will then pass on the weight of obsolescence to the lessor. Once the term agreement for a previous lease expires then a lessee will be able to upgrade at any time.
A well-known advantage of being involved with
References: Mayo, H. B. (2012). Basic finance: An introduction to financial institutions, investments, and management (10th ed.). Mason, OH: South-Western. Titman, S., Keown, A. J., & Martin, J. D. (2014). Financial management: Principles and applications (12th ed.). Upper Saddle River, NJ: Pearson/Prentice Hall.