Cash is a precious asset, and arguably the most precious asset a business can have. Perhaps it's the reason cash is the first line item listed on the balance sheet (yes, it really is the reason - order of liquidity). It therefore makes me wonder why so many businesses continue to "invest" substantial amounts of cash on equipment that will be obsolete in 5 - 7 years.
I often listen to prospective clients tell me that purchasing capital equipment with cash, bonds or operating lines is the best way to manage their balance sheet. These types of prospective clients enjoy the depreciation benefit, and they generally use the equipment until the assets are no longer in working condition. Perhaps in some cases, this does make sense. However, I would argue that for depreciating equipment with a short-useful life, leasing is the only way to manage these assets.