KEVOS® WORKOS · Business
Buy or Lease
Should you buy or lease this equipment?
Compares buying and leasing an asset in present-value terms over the same period.
Open the calculatorRuns in your browser. No account needed.
How this tool works
Inputs, units and where to find them
| Input | Unit | Typical source |
|---|---|---|
| Purchase price | $ | Purchase price including delivery and installation |
| Expected resale value | $ | Expected resale value at the end of the period (dealer or auction evidence) |
| Annual ownership maintenance | $ | Annual maintenance and insurance when owned |
| Monthly lease payment | $ | Monthly lease payment |
| Lease upfront / fees | $ | Lease establishment fees and upfront payments |
| Comparison period | years | Comparison period (usually the lease term) |
| Discount rate (your approved rate) | % | Your cost of capital or approved discount rate |
Method and formulas
- Buy PV = price + maintenance × annuity factor − residual ÷ (1 + r)ⁿ
- Lease PV = upfront + monthly payment × monthly annuity factor (monthly rate from the annual rate)
Limitations
- Pre-tax; ignores depreciation, interest deductibility and accounting treatment
- Assumes maintenance is not included in the lease
Typical uses
- Equipment, vehicle and machinery acquisitions
Who it is for
- Business owners
- Finance managers
What you get
- BUY or LEASE
- Present value of each option
- Undiscounted and present-value table
Interpreting the result
- A small PV difference means flexibility and risk should decide
References
- AASB 16 Leases (accounting treatment)
- Brealey R., Myers S. and Allen F., Principles of Corporate Finance (McGraw-Hill), leasing
WORKOS tools are screening and decision-support utilities. Verify important financial, engineering, safety, legal or operational decisions using appropriate professional standards and your organisation’s approved data.
