Entrepreneurial Small Business 4th Edition by Jerome Katz ,Richard Green

Exercise 8

Assume that you have a plumbing business that requires the use of a backhoe. Contact equipment rental businesses in your area and find out the rental cost and terms for a suitable machine. Contact leasing companies to find out the cost of leasing a similar backhoe. Assume that, on average, you need the machine for 12 hours weekly. Which is more advantageous, renting or leasing How would your answer change if you needed the machine an average of 20 hours per week At what level of usage would you be indifferent between renting and leasing