Analysis of Renting vs Buying SEM Microscopes from Gulf Scientific Corporation, Olympus Corporation and Nikon Corporation

This finance assignment analyzes the pros and cons of renting vs buying SEM microscopes from Gulf Scientific Corporation, Olympus Corporation and Nikon Corporation. Factors such as finances, location and technology are discussed to arrive at a decision.

FINANCE
ASSIGNMENT

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By student name
Professor
University
Date: 25 April 2018.
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Contents
Introduction.................................................................................................................................................3
Discussion and Analysis...............................................................................................................................3
Conclusion and Recommendation...............................................................................................................4
References...................................................................................................................................................5
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Introduction
In the given assignment, three companies have been chosen for analysis which are in the business of
selling the SEM microscopes. One of the chosen companies is in Dubai whereas the other 2 companies
are the international companies. The purpose of the study is to find out whether to rent or to buy the
microscope for any given project.
Discussion and Analysis
The company which is situated in Dubai and dealing in the buying and selling of the microscopes is Gulf
Scientific Corporation which is a leader in the Middle East in terms of providing the end to end solutions
for laboratory (Choy, 2018). They provide the customer with broad range of technologies in the fields
relating to analytics, material and life sciences. The company offers world class maintenance services
with the help of the certified engineers. The company has a history of over 25 years and has more than
200 employees and off late the company has developed strategic partnerships with market giants like
Merck, PerkinElmer, Applied Biosystems and many others so as to ensure quality services for the clients
at all periods of time.
The 2 other companies which have been selected for analysing the renting versus buying option are
Olympus Corporation and Nikon Corporation. Both of these are Japanese based multinational
companies having presence and business all over the world. Olympus is dealing in optics and
reprographic products and has a history of 99 years (Goldmann, 2016). It specialises in microscopes and
thermometers and holds nearly 70 percent of the endoscope market share globally. It is headquartered
in Tokyo, Japan and has over 40000 employees. It serves products for industrial, domestic, surgical,
medical and scientific uses as well.
The company has been coming off with a number of developmental projects off late like those of high
temperature ultrasonic testing and an end to end solution for aircraft bolt hole inspection without any
manual adjustments for filters. Since the company has been facing stiff competition from the
competitors in the world market especially in the cameras, it has come up with technologies like
mirrorless system cameras and also in-camera filter effects (Linden & Freeman, 2017).
In case the 3rd company is being talked about, Nikon is a 101 year old company which is traded on Tokyo
Stock Exchange and employs more than 25000 people. The company specialises in the optics and
imaging products and the main product line includes camera, lenses, measurement instruments,
microscopes, binoculars, rifle scopes, steppers, etc. (Alexander, 2016). The company was reported as 8th
largest manufacturer of the chips. It has a wide variety of competitors but the major of them is in
camera market and includes Sony, Canon, Fujifilm, Panasonic, and Olympus.
The company Nikon developed the first lithography equipment which is one of the essentials for
semiconductor manufacturing and it was the leading producer of the same in the world until the 1990s.
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Off late the company has lost a major market share and also not been able to meet its revenues as well
as the margins. This has forced the company to do many job cuts (Jefferson, 2017).
The decision of buying vs renting of the microscopes is a financial management decision which involves
various other factors to be analysed. Some of the include what will be the opportunity costs, the cost of
funds upfront, the inflow and the outflow of cash, the depreciation benefit, the taxation implications,
the life of the machine, etc. (Rimmer, 2017). The concept relates to the relevant decision making where
the company should be in the most profitable situation.
Conclusion and Recommendation
From the above discussion and analysis, we can see that there are 3 companies from which the decision
of buying or renting of the SIM microscope can be taken but there are various factors which needs to be
taken care off before arriving at the decision. The most important and critical factor is the finances, if
the same can be arranged at low interest rate or the rate of lending is high. If the cash is idle, it is better
to buy but the same leads to blockage of the funds. Secondly the location also needs to be taken into
consideration. Thirdly, it is the technology which plays a very crucial role when it comes to equipment’s
and machinery as it keeps on changing so dynamically and therefore it needs to be assessed if the
equipment under evaluation would be flexible enough to meet all the requirements and sustain the
market changes.
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References
Alexander, F. (2016). The Changing Face of Accountability. The Journal of Higher Education, 71(4), 411-
431.
Choy, Y. K. (2018). Cost-benefit Analysis, Values, Wellbeing and Ethics: An Indigenous Worldview
Analysis. Ecological Economics, 145. Retrieved from
https://doi.org/10.1016/j.ecolecon.2017.08.005
Goldmann, K. (2016). Financial Liquidity and Profitability Management in Practice of Polish Business.
Financial Environment and Business Development, 4(3), 103-112.
Jefferson, M. (2017). Energy, Complexity and Wealth Maximization, R. Ayres. Springer, Switzerland .
Technological Forecasting and Social Change, 353-354.
Linden, B., & Freeman, R. (2017). Profit and Other Values: Thick Evaluation in Decision Making. Business
Ethics Quarterly, 27(3), 353-379. Retrieved from https://doi.org/10.1017/beq.2017.1
Rimmer, M. (2017). The Trans-Pacific Partnership: Intellectual property, public health, and access to
essential medicines. . Intellectual Property Journal, 29(2), 277.
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