Lease Vs Buy Analysis Corporate Finance Now

Next, Alex looked at an operating lease. The leasing company offered a five-year term. The payments were higher than the interest on a loan, but they were as an operating expense.

The real kicker? . In the fast-moving world of EV tech, these vans might be paperweights in five years. With a lease, Midwest could simply hand the keys back at the end of the term. The "Residual Value"—what the vans are worth at the end—was the leasing company’s problem, not Alex’s. Chapter 3: The NPV Showdown lease vs buy analysis corporate finance

The CEO, Sarah, wanted 50 new electric vans. "Buy them," she’d said. "We own our assets. We don’t rent." Next, Alex looked at an operating lease

Alex opened Excel to calculate the .

Alex started with the purchase model. If Midwest Logistics bought the vans outright for $3 million, they’d get the . Under current tax laws, they could front-load the depreciation, reducing their taxable income significantly in the first few years. The real kicker

Alex mapped out the after-tax lease payments.