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CIPS Exam L4M7 Topic 10 Question 53 Discussion
Topic #: 10
A construction organization requires specialist equipment for digging deep foundations. Which of the following circumstances would result in the hire of equipment rather than leasing it?
A. The finance available and the potential profits available on the eventual sale of the leased equipment compared to hire costs B. The expected frequency of use, the storage available, and the lease cost of the equipment compared to hiring it C. The subjective assessment of multiple factors for both hire and lease by the directors D. The results of a discounted cost analysis using comparative weekly payments for both hire and lease options
Hiring is often preferred when:
Frequency of use is low: If equipment is only needed occasionally, hiring is more economical.
Storage is unavailable: Leased equipment needs storage, which incurs additional costs.
Lease costs exceed hiring costs for limited use.
Whole-life asset management emphasizes cost-efficient solutions, and hiring equipment for limited use reduces unnecessary expenses compared to leasing or purchasing.
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