This simulation is designed to enhance our knowledge on the decision-making aspects of evaluating lease versus buy options. Bonnesante Research will show decision-making options for leasing or buying a computer and for acquiring a spectrometer. In addition, the company has plans to upgrade its manufacturing capacity. Throughout the decision-making process, we should be able to analyze the lease versus buy option with the given details and become more knowledgeable of the process and the options that are best for the company.
In the first scenario, Bonnesante Research needed to have an accessible computer to run its Food and Drug Administration department. This would allow the company to have access to its first drug inventory. Therefore, my job was to decide the best option with little timing for the company, which was whether they should they lease or buy this equipment. With little timing, I felt the best choice for Bonnesante Research would be to lease a mainframe computer, which has all the necessary tools it needs to utilize in such short time.
Also, leasing equipment has a lower cash flow option; I was able to select a 30-month lease with no down payment. This will help preserve capital for other expenditures.
In the second scenario, the Bonnesante Research has to decide whether it should purchase the spectrometer for Research and Development (R&D) through operating lease, capital lease, or buying. I opted for buying the spectrometer because this would allow for more opportunities in the future and the spectrometer could be used for many years. There are some circumstances in which purchasing out weighs leasing; this is one of the situations where it is more feasible to do so.
In the third scenario, the company has decided it needs a manufacturing department. The decision that needs to be made is whether...