As a facility manager, given the steps in comparing cost of acquiring material or renting it. What will be your decision and justify your answer.

Step 1: Get basic cost information:

Scissor-lift manufacturer, model number, capacity, reach, drive type, etc.

Purchase cost: $15,000

Expected life: 5 years

Expected use in hours per year: 1,500

Monthly rentals per year: 8

Monthly rental rate: $600

Pickup/delivery per rental: $100

Step 2: Determine cost to own:

Depreciation: $10,000

Capital cost: $4,000

Overhead: $2,500

Overhaul parts and labor: $5,900

Subtotal $22,400

Less resale value: $4,500

Total cost to own: $17,900.

Step 3: Cost to operate:

Labor: $12,000

Parts: $3,000

Lube: $800

Tires: $500

Total $16,300.

Step 4: Cost to rent

Rental fees: $24,000

Pickup and delivery charges: $4,000

Total to rent: $28,000.

Step 5: Compare costs to buy or rent:

Total cost to own: $17,900

Total cost to operate: $16,300

Subtotal cost to buy: $34,200

Total cost to rent: $28,000.