-risk Analysis for Lease Charge Determination-

Under the situation of the furious compet.ition among the leasing companies, the important problem for a leasing company's management is to determine a lease charge on each lease contract suitably from the managemmt viewpoint. A lease charge is considered to be suitable when the leasing company can get an appropriate profit through the contract. But quite a lot of leasing companies adopt a full payout method for the lease charge determination. It may not be a desirable method in the above mentioned situation because the comparative high lease charge makes its competitive power down. So, it is important for a leasing company to determine suitable lease charges which satisfy both the leasing company's need and its client requirements. This paper proposes a lease charge determination method for a leasing company based on the risk analysis. The method which we propose in this paper has two eminent characteristics. One of them is that the risk can be treated probabilistically. The other is that the concept of two profit levels (the "nect,ssary profit level" as minimum necessary profit and the "sufficient profit level" as maximum obtainable profit) is introduced as the lease charge determination criterion. The advantages of this method are as follows: (1) t.he lease charge which satisfies given risk conditions can be determined by using the disposal price distribution of the lease object, (2) the suitable lease charge can be given in the form of "a certain range" which makes the lease charge negotiation with its client flexible. In this paper, firstly, we explain the lease charge determination method, secondly, we give the lease charge determination procedures, thirdly. we discuss some characteristics of this method and finally, we show numerical examples.