In information systems procurement and financial planning, management may decide to rent a computer system rather than purchase one. Which reasons commonly justify a rental decision, such as tax advantages, avoiding a large one-time capital outlay, or gaining hardware flexibility?

Introduction / Context:
Organizations frequently face a build-buy-rent decision for computing infrastructure. Renting (for example, leasing equipment or using Infrastructure-as-a-Service) shifts costs, risk, and flexibility in ways that can be strategically attractive. This question checks your understanding of why a management team would rationally prefer renting instead of outright purchase.

Given Data / Assumptions:

• Management is evaluating financial and operational implications.
• Options include capital purchase versus rental/lease.
• Consider tax strategy, cash flow, and technology change risk.

Concept / Approach:

Renting can improve cash flow by replacing a large capital expenditure with predictable operating expenses. In many jurisdictions, lease payments are deductible as operating expenses, yielding tax advantages. Renting also improves operational flexibility: equipment can be refreshed more often, scaled up or down, or swapped for newer models without residual asset risk on the balance sheet.

Step-by-Step Solution:

Verification / Alternative check:

Common CFO analyses compare Net Present Value and Total Cost of Ownership of purchase vs. lease, often showing that cash preservation and flexibility justify rental in rapidly changing tech environments.

Why Other Options Are Wrong:

Each single reason is valid, but the best answer aggregates them. Choosing only one understates the multidimensional benefits.

Common Pitfalls:

Ignoring contract terms such as early termination fees or return conditions that can reduce flexibility if not negotiated properly.

Final Answer:

All of the above