Creating A Decision Support System – Coursework Example

Creating Decision Support System When a company decide whether to lease or buy agiven businessequipment, it reason out the estimated net price of the asset. From the fact that thecompany need for the product will expire before the lease is an important factorto be considered. Leasing equipment is first-class option for thebusiness owners who haveinadequate capital.Companies who need to upgrade after few yearsrequires rental. For our case of Grapevine Company,a vehicle undergoes acquisition by using high down payments for this instance it was $4000,mileage restrictionsand hefty early termination penalties. The other vehicles were purchased through loans; they were subject to high depreciation cost and substantial maintenance fee.
Leasing is the better option for the company since the company is still young and needsanupgrade to reach more consumers (Osheroff, 2007). The advantage he will incur from this includes; lowinitial cost for the company it is around $125,this allows vine grape company to acquire assets using lower initial expenditures. Because the asset leased,hardly ever need down payment. Company can obtain the goods they need without considerably affecting their cash flow.  Contract spending can be deducted as abusiness the expenses on their tax return; this reduces the net cost of their lease. Leasing ensures that companies deal with the problem of obsolescence. However, leasing Pose problems in that it lacks right to own a property. The obligation to pay for the whole period even if one stopped using the equipment. Buying equipment from the statistics shows that thereare high initial costs of about $34997 for this company,and the final value of depreciation is subtle around $22980. On the other hand,hired vehicles remainwholly owned by the enterprise. Conclusively, the vine grape company should lease the cars.Since thecompany it is in theprocess of upgradefirstmonth payment of $500 is a friendly cost. Buying vehicles could affect the financial build up of the enterprise due to high initial cost and high rate of depreciation.
Work Cited
Osheroff, Jerome A., et al. "A roadmap for national action on clinical decision support." Journal of the American medical informatics association 14.2 (2007): 141-145.
Work Cited