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Companies create capacity through replacing existing equipment or purchasing new equipment.  Due to the high cost of these decisions, as well as their impact on cash flow, it's important to compare leasing and purchasing alternatives, evaluating capital alternatives using the net present value method and capital alternatives using the payback period method.

In this course you learn how successful companies in the innovation economy create the capacity to produce new products and services through lease vs. buy analysis. 

 

Learning Objectives

  • Articulate the process for acquiring or replacing new capital equipment.
  • Explain the time value of money and its impact on decision making.
  • Compare leasing and purchasing alternatives for new capital equipment.
  • Evaluate capital alternatives using the net present value method.
  • Evaluate capital alternatives using the payback period method.

2 Reviews (11 ratings)Reviews

4
Anonymous Author
Great overview of managerial accounting. I liked the various examples used throughout the class.
3
Anonymous Author
Good basic overview. It would be more useful to have examples in Excel.

Prerequisites

Course Complexity: Foundational

No advanced preparation or prerequisites are required for this course.

Education Provider Information

Company:
Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact:
For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .
Course Syllabus
INTRODUCTION AND OVERVIEW
Capital Budgeting Considerations
  5:27Capital Budgeting Process
  8:34Time Value of Money
Lease vs Purchase
  3:48Lease vs Purchase
  2:52Lease vs Purchase Example
  20:51Hands on Examples
Payback
  2:06Payback Period
Conclusion
  2:40Summary
Continuous Play
  50:14Creating Capacity and Capital Budgeting Considerations
SUPPORTING MATERIALS
  PDFSlides: Capital Budgeting
  PDFCapital Budgeting Glossary Index
REVIEW & TEST
  quizREVIEW QUESTIONS
 examFINAL EXAM