Formal Report Essay Example | Topics and Well Written Essays - 1250 words

Formal Report - Essay Example In purchasing equipments like laptops and desktops, it is feasible and good to pick leasing, as it is cost effective. It is good to examine the management of information and technology process of an agency, determine the business needs of the institution concerning information technology and acquit an analysis based on the benefit of cost choice of leasing and purchasing, in the decision whether to purchase or lease equipments. If the decision is made in the correct way and for a good reason, it is effective in terms of cost and efficient to lease than purchasing equipments. It can be harder to manage and expensive to lease than an instant purchase of equipments, if the decisions are handled in the wrong way. Introduction Present value It is hard to compare the same amount of cost between the option of purchasing and leasing in the concept of present value. The cost of the future currency in today’s value of the currency is what referred to as the present value. Money availabl e for future worth less at this time than the money you can use at that particular time. The future money one should use in leasing or purchasing is be converted to the current price to equate the actual cost of each one, when equating the alternative of leasing and purchasing. Information Technology Acquisition The first option of getting information technology in companies and institutions is by the outright purchase, which is gotten through the fund or revenue of any agency. This can only happen if restrictions are applied on the funds. Capital leasing is the second option, which is an accord that spreads the payment terms of equipments. After payment, the person who has bought the equipment, obtains a title to the equipment, but still he has been able to get access of the equipments. The buyer is able to spread the payment of the equipments in a given time to reduce the financial burden due to its acquisition. In an operating lease, one does not get ownership of the equipments. The seller retains ownership of the equipments and the person who has leased the equipments uses the technology for a given period (Taylor, 2003). Management issues The budget of information and technology has changed in all sectors, due to the fast development of information systems. This drastic change has led to the evaluation of the management issues of information technology. To control and understand the environment based on computers, full ownership cost and asset management, is required. Asset management binds the whole information technology ownership. It provides the environment control of computers to allow the director to purchase information technology equipments and price for the maximum cost efficiency. Lease terms should not be over 75 percent of the equipment. If the institution wishes to buy an item after a leasing period, the organization must pay the required price. The value at the starting point of the lease is not equal or greater than 90 percent. At the end o f the lease, the lease cannot give the buyer the ownership of the