Finance Leasing Manual - FLM6.40

Computer analysis: operating lessors

Traditional finance leasing cash flows are more predictable than those from operating leasing and lend themselves ideally to computer analysis using, in one form or another, 'net present value' analysis, see FLM6.39. By contrast, an operating lessor has to make normal business judgments - how often will he hire out the kit over its life, what charges will the market bear in the future and how fast will the kit wear out or become obsolete? See FLM1.05 onwards for more on operating leases.