Leasing Policy Under Technological Advances : Risk Analysis for Lease Charge Determination

Abstract

Under the situation of the furious competition among the leasing companie$, the irnportant problem for a leasing companyis management is to determine a lease charge on each Lease contract suitabty from the management viewpoint, A lea$e charge is considered to be suitable when the leasing company can get an appropriate profit through the contract, But quite a lot of leasing coriLpanies adopt a full payout method for the lease charge determination. It may not be a desirable method in the above mentioned situation because the comparative high lease chaTge makes its competit･ive power down. Se, it is important fdr a leasing compuny to determine suitable lease charges which satisfy both the teasing companyis need and its client requiremenLs. This paper proposes a Iease charge determination method for a Ieasing compally based on the risk analysis. The method which we propose in this paper has two eminent charact･eristics. One of them is that the risk can be treated probabilisLica]ly. The other is that the concept of two profit levels (the "necessary profit level " as minimum necessary profit and the C`suficient profit level " as maximum obtainable profit) is introduced as the lease charge determination criterion. The advantages of this method are as fo11ows: (1) the lease charge whieh satisfies given risk conditions can be dete:mined by using the disposal price d}stributlon of the lease object, (2) the suitable lease charge can be given in the form of "a certain range" which makes the lease charge negotiation with its client flexible. In this paper, firstly, we explain t,he lease charge determination rnethod, secondly, we give the lease charge determination proeedures, thirdly, we discuss some characteristics.of this method and finally, we show numerica] examples.

Equipment Replacement Behavior Under Innovative Technological Advances

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“…There has been a study which classifies technology development strategies into the two patterns [10]. Also, concerning a leasing system as a new acquisition method of equipment, there has been a study in determining lease chaxge taking the ITA's appearance into account [14].…”