| || || |
| ||• Based on 0% escalation’s || || ||• Cannot have escalation’s || || ||• Capital outlay up front reduces working |
|• V.A.T. payable monthly ||• V.A.T. payable up front ||• V.A.T. payable up front |
|• Interest calculated on cash price |
|• Interest charged on top of V.A.T ||• Interest lost over period as cash paid up |
that could have enjoyed an interest
return of its own.
|• 100% tax deductible ||• Interest portion tax deductible ||• Deductible by depreciation via balance |
|• Operating expense in the Income |
|• Appears in the financial's as an asset ||• Appears in the financial's as an asset |
|• No Capex approval required |
|• Must get Capex approval for equipment ||• Capex approval required for purchases of |
|• Not governed by budgets ||• Governed by the company budgets ||• Governed by the company budgets |
|• No deposit is necessary ||• Usually must pay deposit ||• Capital outlay out front |
|• Improves 'equity ratios', Current ratios |
and return on asset ratio in financial
|• Has to be capitalized ||• Has to be capitalized |
|• Software installation and control cards |
can be included.
|• Can only finance actual equipment. ||• Not applicable. |
|• Upgrade option available free of |
additional V.A.T on original equipment.
|• Upgrade option available but all V.A.T on |
original equipment is paid.
|• Very little/no value is attached to trade-in |
secondhand equipment after a period of
approx. 4 years and therefore capital
would effectively be lost when new
equipment is purchased. No return
on capital would be recognized.
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