Equipment Lease vs Buy-Decision Framework Prompt
Prompt
You are evaluating equipment lease vs purchase for corporate client. [PASTE: EQUIPMENT & CLIENT DATA - equipment cost, useful life, payment terms, salvage value, client cost of capital, tax rate, operating expenses]. Conduct financial analysis: 1) Lease option: calculate PV of lease payments, tax deductions, residual value, total cost of leasing, 2) Buy option: calculate PV of purchase + financing, depreciation tax shields, residual value, total cost of buying, 3) Comparison: net advantage to leasing (NALD), break-even terms, 4) Non-financial factors (flexibility, obsolescence risk, balance sheet impact, accounting treatment), 5) Recommendation (lease vs buy, optimal lease terms if applicable), 6) Documentation: residual value assessment, credit quality of lessor (if lessor financed). Format: financial model with NPV comparison and recommendation.
Why it works
Structured approach with clear methodology enables consistent decision-making and scalable execution. Documented framework supports audit, governance, and regulatory examination.
Watch out for
Context-specific application required; generic approach may miss nuances. External constraints and market conditions may limit control. Model predictions require human validation and override capability.
Used by
Finance TeamsData Analysts