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Thread: buy, lease or hire machinery?

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    n00b todd0 is on a distinguished road
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    Default buy, lease or hire machinery?

    Hi, I have just started working for an electrical contracting company in Australia, we are looking at our options for the machinery we will need for upcoming projects

    I'm curious to know the tax advantages/disadvantages for the following options

    If the machine in question had a value of $160,000
    Would we be better off?

    Purchasing the machine.Owning the machine, and having all the maintenance fees. Including Fuel.

    Leasing the machine. This would most likely be a 5 year lease with a 30% residual, ontop of which we would have maintenance fees. Including Fuel.

    Dry Hire. Hiring the machine from another company, We would be paying for Fuel, and grease, as well as any damages incurred. Dry hire is usually charged on a weekly rate. probably around $1200-$1500 for the machine in question.

    Wet Hire. Hiring the machine from another company, as well as an operator. Paying an hourly rate probably around $100-120 per hour of hire for the machine in question. We would not pay for maintenance or fuel.

    Interested to know what the best option is in the long run. we would probably need the machine for an average of 40 hours a week per year.

  2. #2
    n00b todd0 is on a distinguished road
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    Sorry, the interest rate on the lease would be 8%

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