Cost analysis // Equipment costs // Leasing // Monthly lease payment

Here is a quick and easy way to estimate what a piece of equipment can actually cost using leasing and after tax costs. Since qualifying leases can be expensed directly, the tax benefits are available sooner.

Here is an example:

1. Determine the equipment cost $89,900.00
2. Monthly Lease Payment (60 month lease*) $1977.00
3. Tax deduction (We’ll use 40% of gross**) $790.80
4. Deduct line 3 from line 2 to get the net cost per month $1186.20

Now let's translate this into operating figures:

5. Divide by 22 business days*** to get the net cost per day $53.92
Divide by 8 hours**** to get the net cost per hour $6.74

Thus a $90,000 piece of equipment can really cost less than $7 an hour

NOW TRY THIS WITH YOUR SITUATION:

1. Equipment Cost $______
2. Monthly Payment (line 1 x .0235) $______
3. Tax Deduction ( ___ % of line 2) $______
4. Net Monthly Cost (line 2 less line 3) $______
5. Net Daily Cost (line 4 ÷ by ___ days) $______
6. Net Hourly Cost (line 5 ÷ by ___ hrs) $______

*Illustration only. Actual rate may vary.
** Federal plus state usually around 40%.
*** Avg. # of business days/month at five days per week.
**** Select hours of operation per day.