Live Chat
Monday - Friday 8am - 6pm EST Chat Now
Contact Us
Monday - Friday 8am - 8pm EST 1-800-268-7737 Other Contact Options
Checkout

Cart () Loading...

    • Quantity:
    • Delivery:
    • Dates:
    • Location:

    $

PMP Formula of the Week: Rent, Lease or Buy?

Date:
Aug. 17, 2015
Author:
Guest Authors

PMPFormulaOTW475166460You are the project manager on a construction project where you are deliberating between renting, leasing or purchasing a large piece of equipment.

Equipment pricing:


  • Rent at a cost of $2,500 per day.

  • Lease for a 60 day period at $2,500 per day, with a 10% discount.

  • Purchase at a price of $100,000.


By looking at your project schedule, you have estimated that you will use the equipment about 50 to 60 days. Based only on price, which decision would you recommend?

A. Purchase the equipment.
B. Lease the equipment.
C. Rent the equipment.
D. You do not have enough information to make a determination.

[showhide type="post" more_text="Reveal Answer" less_text="Hide Answer"]

The correct answer is A.

You can purchase the equipment for $100,000, whereas renting the equipment for 50 to 60 days would cost $125,000 to $150,000 or leasing the equipment for 60 days would cost $135,000.

Therefore, based only on price, the better choice is to purchase the equipment, answer A, rather than renting, answer C, or leasing, answer B.

[/showhide]

Related Resources
PMP Exam Prep Mobile App
Project Management White Papers

Related Courses
IT Project Management
Project Management Fundamentals
Project Management, Leadership, and Communication
PMP Exam Prep Boot Camp