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Replace or Repair?

The answer is: Do whichever is cheaper or better for your business.

Step 1: How much will it cost to make the repairs?

1.______________________________

Step 2: How many months will the repairs last before having a similar repair expense?

2.______________________________

Step 3: Divide the amount on line 1 by the amount on line 2.

3.______________________________

Step 4: How much will it cost to replace the item?

4.______________________________

Step 5: How many months will the item last before it will need similar repairs?

5.______________________________

Step 6: Divide line 4 by line 5.

6.______________________________

If line 3 is less than line 6, then it is probably better to repair the item.
If line 6 is less than line 3, then it is probably time to replace the item.

There are other factors to consider before making the final decision. If replacing looks like the better choice, will it "mess" up your cash flow? Do you absolutely loathe the item and want it out of your business and out of your life? If you want to get rid of it and can afford to get rid of it, then get rid of it.

See a similar article called Buy or Lease?

Copyright © - 2002 Dutch Hawkins Mandeville, LA USA - All Rights Reserved

September 12, 2002