Introduction
Acquiring new equipment in an organization requires a well-thought decision among the owners. The management needs to work on the best way to finance the buying of the machine . Getting the financing for the equipment may pose a problem with the management especially where they do not have a controlling effect. There are different types of funding which include bank loans, venture capitalists, borrowing from friends, crowdfunding , and leasing. Making the right decision requires the management to agree on which way to finance equipment. Considering when the machine breaks down , a cautious decision ought to be taken to avoid the mistakes.
The management has to make some things clear before deciding on the way to fund the purchase of the equipment. The questions the administration will face include whether the money at hand was enough to buy new equipment . The management should be faced with the subject of the records of the machine that continues to break down. If there is a chance that the equipment can be repaired to operate frequently, then acquiring a new equipment will not be necessary. The managers should also indicate the cost of buying a new machine (Bahrami & Evans, 2014). The information that has to be researched on the equipment will be the cost of the equipment , the effectiveness of the equipment .
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The best way to equipment financing will be through leasing. Leasing is unique and will work to help the business meet specific needs compared to direct funding. Rental will help to stretch Newton Company to focus on fundamental operations of the company. Each method of financing has its advantage s and disadvantages. Leasing of the equipment is advantageous since the management will be saved funds to be used directly for the equipment and instead be focused on improving business (Bahrami & Evans, 2014). The leasing company checks on the defective nature of the machine before they hand it over and they may accrue the liability in case of a breakdown.
References
Bahrami, H., & Evans, S. (2014). Super-Flexibility for Knowledge Enterprises : A Toolkit for Dynamic Adaptation. Springer.
