Making your cash purchase of a temporary fabric structure with funds available from working capital is beneficial to you in several ways: |
- Service fees, interest expense and financial fees are waived.
- Inventory cost is shown on the balance sheet subject to the depreciation methods used by the customer.
- Customer ownership is immediate.
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Although outright purchase may provide the lowest total cost, other factors should also be considered: |
- Working capital (cash) which could be used elsewhere is reduced.
- Outright purchase converts cash into a fixed asset (inventory), thereby weakening the customer's "current" ratio. Accordingly, most companies prefer to use available credit lines or time purchase plans if ownership is intended.
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Financing has the same general advantage offered by leasing or rental plans...limited cash outlay. However, financing provides the depreciation and tax benefits of a cash purchase (ownership). |