Lease versus buy decision making in the Navy's satellite communications systems.

Abstract

This study provides a general analysis of the United States (U.S.) Navy's lease versus buy decision model in the satellite communications systems. It also examines the Leased Satellite (LEASAT) and the Ultra High Frequency (UHF) Follow-on satellites. It gives general background information on lease versus buy decisions in both the public and private sectors. It evaluates the inputs affecting the lease/purchase decision, particularly the tax inducement and tax regulations affecting lease/buy decisions in the U.S. satellite communications sector. However, the analysis shows that cost considerations do not always receive top priority. Technical sophistication and risk, managerial considerations, and cash flow implications are among the other factors considered in lease/buy analyses.