Decide whether to lease or buy an asset
A lease-versus-buy comparison on after-tax present value, plus the cash, accounting, and flexibility trade-offs.
The prompt
Help me decide whether to lease or buy an asset.
Asset: [WHAT, expected useful life]
Purchase option: [price, financing rate if borrowed, maintenance, residual value]
Lease option: [term, payments and timing, fees, maintenance included?, end-of-term options]
Our discount rate / cost of debt: [%]
Tax rate and depreciation rules to apply: [DETAILS - or "pre-tax only"]
Other considerations: [cash constraints, covenants, technology obsolescence risk, expected usage]
Steps:
1. Lay out after-tax cash flows for each option over the same period.
2. Calculate the present value of each and the difference.
3. Identify the break-even lease payment or residual value at which the decision flips.
4. Note how each option affects the balance sheet and reported EBITDA under the lease accounting standard I use [ASC 842 / IFRS 16], and any covenant effect.
5. Weigh qualitative factors: flexibility, upgrade path, maintenance risk, and cash preservation.
Return:
- A side-by-side cash flow table and PV summary.
- The break-even analysis.
- A short recommendation with the conditions under which it would change.
Treat tax and accounting treatment as general information to confirm with your accountant. Mark missing inputs [CONFIRM].
Highlighted [brackets] are blanks to replace with your own details.
Fill in the blanks and use this promptMore Finance & Accounting prompts
What to fill in
- WHAT, expected useful life
- DETAILS - or "pre-tax only"
- ASC 842 / IFRS 16
- CONFIRM
How this prompt is built
This prompt follows the RTF structure (Role, Task, Format). RTF tells the model who to be, what to do and what shape the answer should take. It is the quickest structure that still gives noticeably better results than a bare request.
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