CapEx vs OpEx Evaluator
PROAnalyze lease vs. buy, cloud vs. on-premises, and build vs. outsource decisions with TCO modeling, NPV analysis, and risk assessment frameworks.
Example Usage
“We need to decide whether to buy a $180,000 CNC machine outright or lease it for $24,000/year. The machine has a 10-year lifespan, estimated annual maintenance of $12,000 if we own it (included in lease), and we expect 15% residual value. Our cost of capital is 9%. Which option is better financially, and at what maintenance cost would the decision flip?”
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Suggested Customization
| Description | Default | Your Value |
|---|---|---|
| Time period for financial analysis (typical range: 3-10 years) | 5 | |
| Cost of capital or hurdle rate for discounting future cash flows | 0.10 | |
| Expected annual increase in operating costs | 0.03 | |
| Expected lifespan before technology becomes obsolete | 4 | |
| Annual maintenance cost as percentage of purchase price (5-15%) | 0.08 | |
| Expected resale/salvage value as percentage of purchase price | 0.20 |
Research Sources
This skill was built using research from these authoritative sources:
- Understanding CapEx vs. OpEx in Corporate Finance Foundational definitions, accounting treatment, tax implications, and practical examples
- Leasing vs Buying Business Equipment: A Complete Guide Comprehensive comparison of advantages and disadvantages including cash flow and flexibility
- Build vs. Buy Software: Decision Framework 2025 Framework covering cost analysis, strategic evaluation, and implementation roadmaps
- Autonomous CAPEX vs OPEX Decisions AI-driven decision frameworks and optimization algorithms for infrastructure decisions
- CapEx vs. OpEx: Capital & Operating Expenses Explained Detailed explanation of accounting treatment and financial statement impact
- Should You Lease or Buy IT Equipment? Comparative analysis for distributed teams with decision factors and hybrid approaches
- Equipment Leasing vs. Purchasing Comparison Analysis of pros and cons aligned with business growth and IT capacity