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Decision Criterion

Decision Criterion The decision criterion from the point of view of a hirer is the cost of hire purchase vis-a-vis the cost of leasing. If the cost of hire purchase is less than the cost of leasing, the hirer (purchaser) should prefer the hire purchase alternative and...

Financial Evaluation

Financial Evaluation The framework of financial evaluation of a hire purchase deal vis-a-vis a finance lease, discussed below, covers both the hire as well the finance company's viewpoint. From the Point of View of the Hirer (Hire Purchaser) The tax treatment given to...

In the Books of Hirer

In the Books of Hirer The cash purchase price of the asset is capitalized and the capital of the hire purchase installment, that is, the cash purchase price less down payment, if any, recorded as a liability. Depreciation is based on the cash purchase price of the...