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CIPS L4M3 Exam - Topic 8 Question 79 Discussion

Maria is working on a new one-off construction project and is looking to expand a factory. A requisition comes through for an outright purchase of a digger. Maria changes this to a lease order instead. Is she right to do so?
B) Yes, this saves money and the business will not end up with an unwanted asset
A) No, buyers should not challenge or change a requisition
C) No, diggers are not allowed to be leased
D) Yes, equipment should always be leased and never purchased

CIPS L4M3 Exam - Topic 8 Question 79 Discussion

Actual exam question for CIPS's L4M3 exam
Question #: 79
Topic #: 8
[All L4M3 Questions]

Maria is working on a new one-off construction project and is looking to expand a factory. A requisition comes through for an outright purchase of a digger. Maria changes this to a lease order instead. Is she right to do so?

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Suggested Answer: B

For short-term or one-off projects, leasing equipment is often more cost-effective than purchasing. It reduces the financial burden of asset ownership, such as depreciation and maintenance, especially if the equipment is not needed beyond the project's scope. Maria's decision aligns with sound procurement and asset management practices.


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Mitsue
1 day ago
I feel like I read somewhere that you shouldn't change requisitions unless there's a strong reason. So, I'm leaning towards option A, but I could be mistaken.
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Cordie
6 days ago
I remember a similar question where leasing was favored to avoid asset depreciation. So, option B seems reasonable, but I wonder if there are specific rules about leasing diggers.
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Moon
11 days ago
I think Maria might be right to change it to a lease. It could save money in the long run, but I'm not entirely sure if that's always the best option.
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