1 2 3 4 5 6 7 8 9 10 11 12

$(80,000.00)

$(60,000.00)

$(40,000.00)

$(20,000.00)

$-

$20,000.00

$40,000.00

$60,000.00

New Revenue Net Financing Revenue Net Cash Revenue

Months

Revenue

Which option below – Financing or Cash – pro-duces immediate, positive cash flow?

This chart compares the cash flow dominance of financing vs. paying cash for equipment costing $65,000. The new equipment will generate $3500 in new revenue per month and increase 10% each month, $10.5MM during its useful life. Finance cost is 8% annually for 36 months.