Practice Quiz

PMI PMP Project Management

Category - Procurement Management

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While working on a high-profile project at Paper Jungle Inc., Joel is confronted with a dilemma. Should they buy a new high-speed, color printer to produce some highly sensitive corporate materials for the company or should they lease a printer? What would be the best reason for Joel to use when proposing they buy the printer?
  1. The lease cost would be identical to the purchase cost after 10 years.
  2. The purchase cost is ten times more than the lease cost.
  3. They could retain more control over the printed materials.
  4. The purchase and lease cost are equal.
  5. None of these are good reasons.
Explanation
Answer: c - Joel’s proposal to purchase the printer would be best served by Joel impressing upon the stakeholders that the company would have better control over the confidential nature of the materials.

Joel would have a more difficult time justifying his proposal if the lease and purchase cost were identical, or if the lease cost was more economical. 10 years is not a very good payback period for a purchase. The organization might want a different type of printer before then.

Key Take Away: Some firms are more concerned with being in control of their information when it comes to certain high-profile projects which may negate any benefits with respect to cost. Be aware of a firm’s priorities before you approach them with a ‘buy or lease’ proposal.
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