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Buy, finance, rent or lease equipment

Enter price, period of use and the terms of each alternative to see which is cheapest in today’s money, including resale, maintenance and taxes.

Pre-sizing and estimating tool: results do not replace design, calculations or reports signed by a licensed professional, nor verification against the applicable codes and standards.

Preliminary estimate
Equipment
Financing
Rental and lease
Taxes

U.S.: 21% federal plus state tax; 7-year MACRS, or 100% bonus depreciation for property acquired after January 19, 2025 (set 1 year). Operating lease rent is deductible.

—Lowest-cost option
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Present value cost of each option

All payments and receipts over the period of use, discounted to today at the opportunity cost.

Tap the chart to see the values.

Cumulative cost over the period of use

Cumulative present value month by month; the final step is resale or the purchase option.

Tap the chart to see the values.

Loan by year

The report gathers this page's inputs, results, equations, assumptions and references, with fields for project, engineer and revision. In the print dialog, choose Save as PDF.

Method, assumptions and references

Equations used

Equivalent monthly rate: i_m = (1 + i_a)^(1/12) − 1
Level payment: PMT = L · i ÷ (1 − (1 + i)^−n); constant principal: principal = L ÷ n, interest = balance × i
PV cost = Σ after-tax outflows ÷ (1 + k)^m − after-tax resale ÷ (1 + k)^N
Tax shield: (depreciation + interest) × rate when buying; rent or lease payment × rate when renting or leasing

Assumptions and limits

  • Taxes paid in the same month as the expense, and the company is profitable enough to use the deductions.
  • Lease treated as an operating lease for tax purposes; finance lease rules vary by country and contract.

Standards and technical documents

  • Brealey, R. A.; Myers, S. C.; Allen, F. Principles of Corporate Finance, cap. Leasing. McGraw-Hill
  • IFRS 16 / CPC 06 (R2) / ASC 842: Leases
  • Assaf Neto, A. Matemática Financeira e suas Aplicações. Atlas

U.S. regulations

  • IRC §168 (MACRS, bonus depreciation as amended by the One Big Beautiful Bill Act) and §179
  • IRC §163(j): business interest limited to 30% of adjusted taxable income (EBITDA-based from 2025)
  • ASC 842: lease accounting

Frequently asked questions

Is it better to buy or lease equipment?

It depends on period of use, resale value, interest rate and taxes. For short use, renting usually wins; for long use with good resale, buying tends to be cheaper, especially with 100% bonus depreciation.

What is the difference between level payment and constant principal?

Level payments keep each installment equal; constant principal starts with larger installments that fall over time and pays less total interest.

Does leasing have a tax advantage?

Operating lease payments are deductible as paid. With 100% bonus depreciation now available, buying often gives a larger and earlier tax benefit.