Capital  Equipment Purchase

Special  features for any capital  equipment purchase is that it requires long lead period with
high amount of investment or capital  which are no present in the case of  general
consumption items .

Bid sheet is prepared   for  different offers and  offers  are compared on factors  such as  
specification and engineering features , Delivery , Payment terms , After sales service ,
Installation and commissioning , Price , Guarantee and Warrantee for the machine , after
analysis  the vendor is shortlisted and  visits can be arranged by vendor  for site inspection
for such capital equipments.

Finance Dept  or the capital expenditure commitee gives clearance of such invest  by
evaluating  these cost of equipment  through following method

  • Pay back period method

  • Return on Investment  method

  • Internal Rate of Return  method

  • Discounted Cash Flow  method

Other options in Capital Equipment Purchase are

  • Second Hand  or Used Equipment

  • Equipment on Lease
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