Net advantage to leasing (NAL)

Net advantage to leasing (NAL),

Definition of Net advantage to leasing (NAL):

  1. The amount of savings that an individual or a company will achieve by leasing versus purchasing an item. This amount is determined by using a comparison on the total net present values of the lease amount versus the purchase amount. In some cases, this calculation can even take into account the anticipated life of the asset, as well as its depreciation and the cost of any repairs that may be needed.

  2. Net advantage to leasing is a measure that can be used by both individuals and businesses when calculating the differences in the cost of buying versus leasing. Both leasing and buying have a variety of direct and indirect costs. These costs can be analyzed and understood through net present value calculations and a friction cost analysis.

  3. Net advantage to leasing (NAL) refers to the total monetary savings that would potentially result from a person or a business choosing to lease an asset as opposed to purchasing it outright. The benefits of leasing are usually determined by comparing the net present value of purchasing the asset outright to the net present value of leasing it. A method called the friction cost analysis may also be used to measure both the direct and indirect costs; friction costs vary by the buyer.

How to use Net advantage to leasing (NAL) in a sentence?

  1. Net advantage to leasing (NAL) refers to the total monetary savings that would potentially result from a person or a business choosing to lease an asset as opposed to purchasing it outright.
  2. Friction cost analysis is often used in conjunction with net present value to account for both direct and indirect costs that may arise from either a lease or purchase.
  3. Net advantage to leasing (NAL) is arrived at by comparing the net present value of each option and choosing the more favorable option.

Meaning of Net advantage to leasing (NAL) & Net advantage to leasing (NAL) Definition