Date of Award

Fall 1965

Degree Type

Master's Essay - Restricted

Degree Name

Master of Arts (MA)

Department

Business Administration

Abstract

Rising costs and increased competition in recent years has caused a significant number of construction contractor failures or reduced their profitability and liquidity significantly. Production equipment is the largest single cost for the contractor. It is usually acquired from a Construction Machinery Dealer through a cash purchase, installment purchase, or lease. The equipment lease has become increasingly popular in recent years. Leasing terms have also become increasingly favorable for the contractor. These favorable leasing terms can be traced to a large extent to over capacity in the machinery industry, excessive inventories in the hands of the Machinery Dealers, and aggressive merchandising upon the part of the Machinery Dealers. This essay concerns the construction contractor and the economic climate in which he operates; the varying methods of acquiring equipment either through ownership or use; a survey of the results of recognized leasing studies; a brief definition, history and growth of leasing in the construction industry; and a comprehensive comparison between lease versus purchase. In addition to being an informative paper on the topic, this essay establishes that leasing is especially beneficial to contractors because of the particular circumstances in which they conduct their business and justifies this conclusion in what ways and by what means.

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