Business in Action 8th Edition by Courtland Bovee,John Thill

Exercise 16

You're getting ready to expand your woodworking hobby into a full-time business of building custom kitchen cabinets. To create top-quality cabinets, you know you'll need to upgrade from the consumer-grade machinery you have now to industrial-grade equipment. The new equipment will be much more expensive, but, if properly cared for, should last for decades, and you hope to be in business for at least 20 years. If the overall costs of leasing this equipment or borrowing money to buy it are roughly the same, which financing method would you choose? Why?