| Example: Supposing you were required to purchase something new for your company to the value of $10,000. Would you pay cash or would you finance it. The benefits of finance are outlined below.
Paying cash: $10,000 that you cannot use anywhere else
Financing: $73 per week for 36 months
SAVING ON $10,000 USING FINANCE = $ 1,936 |
| Future proofing to avoid equipment obsolescence |
YES |
|
NO |
| Exchange or upgrade option |
YES |
|
NO |
| Flexible payment options |
YES |
|
NO |
| Retain cash |
YES |
|
NO |
| No capital budget approvals required |
NO |
|
YES |
| Bundle software, service and maintenance |
YES |
|
NO |
| All payments fully tax deductible |
YES |
|
NO |
| |
|
|
|
| |
 |
TAX ALLOWANCES ON FINANCE
|
| Cash cost |
$10,000 |
Repayments on $10,000 |
$318 x 36 months |
= $11,448 |
| Less Depreciation Allowance |
=$ 3,000 |
Tax Savings |
$11,448 x 30% |
= $ 3,434 |
Total |
=$ 7,000 |
|
| DEPRECIATION CALCULATION |
- Year 1 Allowance on $10,000 x 33%
|
=$ 3,333 |
- Year 2 Allowance on $10,000 x 33%
|
=$ 3,333 |
- Year 3 Allowance on $10,000 x 33%
|
=$ 3,333 |
| Tax Saving P/A $3,333 x 30% |
=$ 1,000 |
| Over 3 years |
=$ 3,000 |
| |
|
|
|
RETURN ON INVESTMENT (ROI) COMPARISON ON $10,000 ESTIMATED AT 9%
By using finance you retain your valuable cash flow and you are able to generate an income.
This is what is termed ROI.
For this example we are using 9% ROI which is calculated Net profit before tax/total turnover
|
| |
Profit |
Cumulative |
|
=$ 900 |
=$10,900 |
|
=$ 981 |
=$11,881 |
|
=$1,069 |
=$12,950 |
TOTAL ROI on $10,000 over 3 years
|
=$2,950 |
|
| Finance Cost |
 |
|
=$11,448 |
| Less ROI |
|
=$ 2,950 |
| Less Tax Allowance |
|
=$ 3,434 |
| Total |
|
=$ 5,063 |
| SAVING ON $10,000 USING FINANCE |
|
=$ 1,936 |
If you would like more information please call 1300 309 806 or CLICK HERE and a representative will call you as soon as possible.
|
|
 |
|
|
 |
| |
