How do you calculate the profit margin and markup on items that are
rented to a customer?

For example...

We rent items to people. Our cost on these items is $560.00. We rent
these items to people for $185.00 per month. Some rent them for 1
month, some rent for 99 months.

How can we calculate the margin and mark up on a per month basis?

How can we determine a profit per month?

Greetings,
You need to look at accounting for rental and leasing income.
There is no mark up on the equipment in your books, although you may
use a marked up retail value as a basis for the calculation of the
payments that you show your rental customers.  On your books, you
depreciate the equipment as best you choose  - within the constraints
of accounting principles.  You show the rental or lease payments as
income and any financing costs as expense.

Very simplified.

Calculate the amount to be amortized. This is the cost of the item
minus the present value of the after tax salvage value of the item AND
less the present value of the depreciation tax shield.

Then you can calculate the annual after-tax required income based on
the desired rate of return to determine the fee to charge.

Anyone with an MBA should be able to calculate this. PVIF and PVIFA
tables are available online.

Thanks for interesting question.what l think is the best way method u
can use to calculate your profit is cash flow and profit method(DCF),
because you can assum that your cost of capital is $560.00 and the
investment cost $185.00(ie assum at the cost of renting item to people
for $ 185.00) which is to be spread for 99 months(ie assum to be the
depreciation charg for 99 month).from this information you can get
your profit easy l think.