Problem 1: A project of equipment purchase of Mekong Company Ltd. has the estimated data as follows: The cost of equipment is USD 12‚000‚ the cost for transportation and installation is USD 1‚000 USD. The asset is depreciated according to a straight line depreciation scheme within 5 years. It is expected that the project can produce and sell 7‚500 units of product at the price of USD 2 per unit‚ for the first year. The operating costs for the first year (excluding depreciation) are estimated
Premium Depreciation Corporate tax Net present value
the best option for a company to lease or purchase equipment? Each business owner’s situation is different. The decision to buy or lease business equipment is unique. It must be made on a case-by-case basis. Leasing equipment preserves capital giving the business more flexibility. While leasing can be good in the short run it can cost you more in the long run. We will look at the advantages and disadvantages of leasing. My research will look at the different options a company faces if they lease or
Premium Lease Finance lease Leasing
On the other hand‚ buying involves transfer of ownership from seller to buyer. Buying or leasing decision depends mostly on customer’s preference. There are many factors to consider before taking a buying or leasing decision. 2. Factors Influencing Buying vs. Leasing Decision: Following are the factors a customer should consider before taking a buying or leasing decision. 3.1. Advantages of Leasing: 1. Low monthly payment: Monthly lease payments are 30-60% lower than purchase loan
Premium Renting Leasehold estate Leasing
Similarly‚ leasing is a method of financing the acquisition of capital equipment where the user (lessee) of the equipment selects the equipment and is allowed to use the equipment during the period of the lease by paying a predetermined lease rental. The legal ownership continues to vest with the leasing company (lessor). The main difference between the hire purchase and leasing relates to the ownership and accounting treatment. While in the case of lease the ownership of the equipment always remains
Premium Balance sheet Renting Leasing
Wausau Equipment Company Case study Wausau Equipment Company has improved their operating profit a lot by introducing lean strategy. The management’s next step should be in making further Lean improvements. As we know‚ “SIMPA” is widely used in Lean process. “SIMPA” stands for Specify Value‚ Identify Value Stream‚ Make it Flow‚ Pull and Always Improving. These phases draw a big and long-term picture to lead a team logically from detecting the problems to solving the problems and make sure that
Premium Lean manufacturing Manufacturing
holds the possession of the asset. In addition to these major types‚ there are some other types of lease such as sale and lease and leveraged lease. Legally‚ a leasing company is defined as one having the business of hiring plants or equipment or of financing their hire by others. The International Finance Corporation promotes leasing as a method of financing industrial
Premium Balance sheet Asset Financial statements
experienced labor and reliable equipment. They rarely hire new employees‚ and older employees are close to retirement. Furthermore‚ Wausau generally has a culture suspicious of change‚ and employees and managers are resistant to Lean progress. Employees are not motivated to accept lean or previous management methodologies because of the feeling of insecurity‚ and employee morale is low. Wausau is facing other challenges as well. Along with the labor issues‚ equipment downtime is increasing‚ and OEE
Premium Lean manufacturing
The Future of Leasing Based on the analysis of Vinod Kothari (1998)‚ leasing was a potential boon for small and medium-sized businesses in Thailand. In his web site‚ an article published on Bangkok Post in 1998 and the Research Department of Bangkok Bank provided bright‚ positive future for local leasing business due to curtailment of credit by commercial banks and other financial institutions as a result of financial crisis. Kothari (1998) further stated that the percentage share of credit extended
Premium Bank Bangkok Commercial bank
Leasing / Hire Purchase 1. Financing Options • Own Funds • Bank Borrowing / Borrowing • Equity • Leasing • Others Option depends upon • Opportunity cost of funds • Availability of Funds • Debt : Equity Position • Nature of Assets (i.e. obsolescency) 2. What is Lease • Lease can be defined as contractual arrangement where the owner (lessor) of an equipment transfers the right to use the equipment to the user (lessee) for an agreed period
Premium Finance lease Lease Leasing
converted it to pure steel or iron. This machine allowed a lowered price on steel and iron as well as speed in production. This was a major contributor to the production of railroads. The expansion of the railroads greatly increased from 1860 to 1920. Railroads tripled from 1860 to 1880 and then doubled again by 1920. The railroads lowered the cost of shipping which enabled the cheaper movement of raw materials that would be used in factories. These new tracks also connected isolated towns to larger
Premium Industrial Revolution Factory Assembly line