How to compare leases with different terms, e.g. a 5 year lease vs. a 7 year lease.

Options 1 & 2: There are a couple metrics that can be used to compare leases with different terms, the NPV of the Average Annual Cost and the Net Effective Rate (defined in definitions). Both of these metrics are also in LseSum so you can do a side-by-side comparison.

Option 3: Another alternative is to calculate the 5-year cost and NPV for the 7-year lease.

To find this calculation

1. Go to the Lease Term input section and click on the button Show Special Date Options.

2. Next, where it shows Optional – Partial Term, change the term to 60 (for 60 months)

3. Click on the button to show the Partial Term on the Report and then go to the Financial Summary (F on LseMod’s toolbar). At the bottom it will show the partial term cost.

TIP 1: On the Reports sheet, use Modify Report to show or hide the partial term, command is Partial Term Calculation – Show/Not Show.

TIP 2: You can include the Partial Term in your LseSum comparison. On the Mgmt Summary sheet, click on Modify Report and the Add a Line Item. Recommendation is to add the months in the Partial Term, the Total Cost and the NPV.

Related Topics:

How is LseMod Buy different from LseMod Purchase

How to change from Lease Year to Calendar Year to Fiscal Year

How to show a Partial Term in the financial analysis

Applies To:

	Silver Series		Gold Series		Specialty Programs
ü	LseMod Tenant Rep	ü	LseMod Pro		LseMod Condo
ü	LseMod Industrial		LseMod Purchase		LseMod Commission
ü	LseMod Landlord		LseMod Sale Leaseback		SpacePro
	LseMod Buy
ü	LseMod Sublease
ü	LseMod Retail
ü	LseMod Economic Development