Equipment Buy vs. Lease (Canadian)

It is confusing to take decision regarding equipment acquisition that whether to purchase or go for lease. The dilemma between leasing and purchasing decision can be simplified using this ACalculator. By comparing both these options you will be able to reach a solution.
Purchase price
Amount of money required to purchase the equipment.
Down payment
The cash down or capital reduction paid initially while entering the contract.
GST + PST or HST (%)
GST + PST or HST is the tax rate applicable on this purchase. This rate varies from province to province. This percentage is charged on purchase price and lease payment successively for purchase and lease contract.
Investment rate of return
Your expected rate of return you could earn from investments. This amount reflects the earning potential of the dollar amount you could invest in the market instead of leasing or purchasing the asset. This is, in real sense, the opportunity cost of undertaking leasing or financing initiative.
Loan term in months
Number in months it will take to repay the financing. Normally the loans are paid within six years starting from three years. If this duration is greater than the loan’s duration, the options are judged for the time the lease contract was initiated. The excess term is used to calculate the remaining loan amount.
Loan interest rate
The rate of interest annually paid on the loan.
Other fees
Fees like licensing, documentation etc. that is paid initially while purchasing the equipment. This should not include the cash down.
Annual depreciation
This is the rate showing the value by which the purchased equipment will be depreciated every year. The rate can be as low as 10% and as high as more than 20%.
Market value of equipment
This is the residual value of the equipment after the lease is paid off.
Net cost of buying
The cost of purchasing the equipment. This is calculated by deducting the residual value of the equipment from the total of upfront costs, interest lost, and loan balance outstanding at the time of lease expiration.
Lease term in months
Term length in months on the lease contract.
Lease interest rate
Rate of interest charged on the lease.
Other fees
Other than down payments, these are the fees like licensing, documentation etc. that is paid initially while purchasing the equipment.
Residual percent
It is the market value in percentage of the equipment after the lease contract expires. The more this rate becomes higher, the more the lease payment is reduced.
Security deposit
This is the money deposited by you initially when entered into the contract. This amount is refundable by the time the lease expires.
Net cost of lease
The cost of leasing the equipment. This is calculated by adding upfront fees, interest lost for entering the lease (opportunity cost), and total lease payments.