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Non-Tech : Amati investors

AMTX 1.600

-1.8%

Jan 9 9:30 AM EST

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To: John Hunt who wrote (27329)	10/17/1997 1:41:00 PM
From: Scott Patrick Adams	of 31386

My personal opinion of technology lease/buy. I for one would rather lease than buy a ADSL modem and for that matter, the whole dam computer. It really is a bad business decision to own computer equipment at all these days. Why companies buy PC's and network equipment is crazy to me. Leasing is the best way to obtain the use of computer equipment. One has to plan for technology obsolescence with an 18 to 24 month life. Why spend capital on an asset that in 18 months is worth 30% of the original investment? The replacement cost is about the same but the new performance is double. Dell Computer has been successful with their personal lease program and lots of large corporations lease all of their computer equipment. I for one am willing to accept the fact that I will spend $ 150.00 per month for the use of my PC and be comfortable with getting the latest and greatest every 24 months with my recurring cost staying the same and no additional capital investment. I'll keep my $ 3,000.00 I have spent every 3 years or so in investments to augment the cost of the lease. Someday as we start to see real technology convergence I would like see GTE lease me my "Communication Terminal = PC/TV/Video Phone/software/high speed internet device/service." Lastly, someday maybe this type of technology will plateau and we can own it rather than lease it. Take the purchase of a decent PC at say 3,600.00 The lease option looks like this from Dell 24 month lease = 160.00 per month 24 x 160.00 = 3,840.00 in lease payments in two years 3600.00 in vestment tool at 10% per year for two years = $ 4,356.00 At the end of the lease you send it back for the new Pentium III with Terra Flop, VDSL , 21" Flat Panel LCD Active, Windows 2000 and so on and still spend the same 160.00 per month. The purchase option looks like this 3,600.00 cash in two years the equipment with a conservative residual value of 28% of purchase price 900.00 -100.00 (cost of disposing the asset which is much higher than this for corporations) 800.00 -756.00 (the cost of capital @ 10% some companies can make on avg. 25 to 30%+ with their capital) 44.00 Net - Maybe Now it is time to go out and buy a new PC

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