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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.
Last updated/reviewed: March 12, 2024
4 Reviews (24 ratings)

Reviews

4
Anonymous Author
Great overview of managerial accounting. I liked the various examples used throughout the class.

5
Anonymous Author
This course was very effective at teaching about capital and budget concerns.

3
Anonymous Author
Good basic overview. It would be more useful to have examples in Excel.

5
Member's Profile
This course was excellent as a quick overview/review.

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 .
Instructor for this course
Course Syllabus
INTRODUCTION AND OVERVIEW
Capital Budgeting Considerations
  Capital Budgeting Process5:27
  Time Value of Money8:34
Lease vs Purchase
  Lease vs Purchase3:48
  Lease vs Purchase Example2:52
  Hands on Examples20:51
Payback
  Payback Period2:06
Conclusion
  Summary2:40
Continuous Play
  Creating Capacity and Capital Budgeting Considerations 50:14
SUPPORTING MATERIALS
  Slides: Capital BudgetingPDF
  Capital Budgeting Glossary IndexPDF
REVIEW & TEST
  REVIEW QUESTIONSquiz
 FINAL EXAMexam