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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."

Alex mapped out the after-tax lease payments.

Sarah looked at the NAL calculation. The lease was slightly more expensive in a vacuum, but it saved the warehouse project. "Flexibility is an asset we can't see on the balance sheet," she admitted. lease vs buy analysis corporate finance

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.

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 CEO, Sarah, wanted 50 new electric vans

At the board meeting, Alex didn't just show spreadsheets; he told the story of .

Alex opened Excel to calculate the .

The math was tight. Owning had a slight edge on paper because of the high salvage value Alex assumed. But when Alex factored in the and the fact that a lease preserved cash for the warehouse project, the "hidden" value of the lease started to shine. The Conclusion

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