TL;DR
- First test whether the machine earns its keep at all; only then choose how to pay for it.
- Leasing rarely changes ROI much — it changes cash flow, risk and balance-sheet exposure.
- Compare buy vs lease on NPV at your real cost of capital, not on monthly instalment size.
A weak investment does not become a good one because the instalment is affordable. Mixing financing into the profitability test hides whether the machine itself creates value.
Step 1 — the investment test
Model the machine with the full purchase price and no financing. If payback and NPV are unacceptable in cash terms, stop. Financing cannot repair negative economics; it only spreads them.
Step 2 — the financing test
A = P × i / (1 − (1 + i)^(−n))
- P = financed amount
- i = monthly interest rate
- n = number of instalments
| Criterion | Buy (cash) | Loan | Lease |
|---|---|---|---|
| Upfront cash | Full | Down payment | Low / none |
| Total cost | Lowest | Medium | Usually highest |
| Ownership / residual | Yours | Yours | Often with lessor |
| Technology risk | You carry it | You carry it | Partly transferable |
| Best when | Cash-rich, stable demand | Stable demand, want ownership | Fast tech cycles, tight liquidity |
Typical mistakes
- Judging by instalment affordability instead of total cost of ownership.
- Ignoring end-of-lease terms: residual value, buy-out, return condition, mandatory service.
- Forgetting that a lease is a fixed obligation that survives a demand slump.
- Comparing a 48-month lease against a 60-month loan without normalising the horizon.
€90,000 machine over 60 months
- Loan at 7.5% p.a.
- ≈ €1,803 / month, total ≈ €108,200
- Lease at effective 9.8%
- ≈ €1,905 / month + buy-out €9,000
- Monthly cash benefit
- €4,100
- Verdict
- Both are financeable; the loan is cheaper unless the residual risk matters to you.
Interactive example
Investment, monthly benefit — payback, ROI and NPV
- Payback
- 11.8 months
- ROI over 36 months
- 206 %
- NPV
- € 171.250
Same calculation kernel as the full calculators. For a decision-grade result, open the matching calculator.
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