When I was a young business man I did go figure this out.
Originally posted by thehumid1
The three new units financed all under warranty for 3 years was less monthly than my service contract with them but they could not do it because the company was not allowed to finance capital improvements. Go figure.
It never made sense to me either. The cost of doing business you can take right off the top. Repairing something is considered "the cost of doing business." When you buy a new piece of equipment the only thing you can deduct from your taxes is the depreciation on the equipment.
Same thing in new construction. The bank will only give them so much money per square foot to build a building. So they cut and cut to get the cost down. First place they look to cut is the air conditioning systems. After they get into the building and start making money then they upgrade the equipment.
When the down time of a piece of equipment cuts into your production then it is time to look at replacing it. But when you have 300 rooms in a hotel what's the chances that they will be 100% full.