How can leasing improve cost management compared to purchasing?

Leasing can improve cost management primarily by including maintenance in the lease agreement. This arrangement allows businesses to predict and control their maintenance expenses more effectively. When maintenance is included, companies can avoid unexpected costs and disruptions associated with equipment failure or service interruptions. This predictability enhances budget planning and can lead to more efficient resource allocation.

Additionally, since maintenance is part of the lease, the financial burden of upkeep and potential repairs is shifted from the lessee to the lessor, further alleviating upfront costs and responsibility. This arrangement can be particularly beneficial for businesses that rely on equipment that requires regular maintenance, as it helps to keep operations smooth while managing overall expenditure.

Other options like providing flexible payment options and reducing upfront investment do contribute to cost management but do not directly tie into the predictability and managed responsibility that maintenance inclusion offers. While depreciation can be a financial consideration, it is less relevant in the context of leasing, as the lessor may retain ownership and the associated depreciation benefits.