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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