Buy Analysis Corporate Finance: Lease Vs

Alex sat in the dimly lit office of Midwest Logistics , the hum of a dying HVAC system a constant reminder of the company's aging infrastructure. As the newly minted Director of Finance, Alex had one job: modernize the delivery fleet without sinking the company’s cash reserves.

The CEO, Sarah, wanted 50 new electric vans. "Buy them," she’d said. "We own our assets. We don’t rent." lease vs buy analysis corporate finance

Alex mapped out the after-tax lease payments. Alex sat in the dimly lit office of

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 "Buy them," she’d said

Alex mapped out the purchase price, the tax savings from depreciation, and the estimated salvage value (the "leftover" cash when they sell the vans later), all discounted at the company's after-tax cost of debt.