n I pay the dealer a lot of money, and the car is mine. I still have expenses associated with the car as I drive it, but the up-front cost is major. Even if I lease the car, however, I still have to pay some one-time fees that do not recur each month of the lease. There is also a cost per unit time. Telephone transport is typically leased from a fa- cilities provider, often the public switched telephone network (PSTN). We give them the A-to-B routing and the size of the pipe, and they tell us how much to pay each month if we want to lease the facilities. The payment continues as long as we have the Downloaded from Digital Engineering Library @ McGraw-Hill (www.digitalengineeringlibrary.com) Copyright © 2004 The McGraw-Hill Companies. All rights reserved. Any use is subject to the Terms of Use as given at the website. Business-Case Models Modeling for CDMA equipment or the service. We can have leasing agreements that specify when we can stop paying, but the payment is a linear time function, a cost per time for each item or service. This is not the same as a monthly payment on equipment we own. Even though we are paying a certain amount per month in installment payments, we own the equip- ment as an asset, and we carry an accounting liability on our books. The distinction be- tween one-time and ongoing payments is not about cash-flow but about a truly differ- ent relationship, buying something or leasing it. The ongoing cost of a piece of equipment does include operating and maintaining it. Lower power requirements or less frequent repairs can justify a higher price in the pur- chase decision. Equipment life expectancy also fits into the equation because the cost of more frequent replacement is also an ongoing cost of ownership. Cost components are sometimes broken down into capital expense (CAPEX) and operating expense (OPEX). How we compare up-front and ongoing costs depends on how we value money over time. If our company has a lot of loans at 10 percent per year, then we can equate a $1000 one-time cost with a 