HSA6900 Deliverable 2 - Lease Versus Purchase

Question # 00846843 Posted By: wildcraft Updated on: 10/14/2023 04:01 AM Due on: 10/14/2023
Subject Nursing Topic Nursing Tutorials:
Question
Dot Image

HSA6900 Deliverable 7

Deliverable 2 - Lease Versus Purchase

Assignment Content

  1. Competency
    Analyze financial information for the purpose of making viable management decisions.


    Student Success Criteria
    View the grading rubric for this deliverable by selecting the “This item is graded with a rubric” link, which is located in the Details & Information pane.


    Scenario
    Health resources are finite. Therefore, it is incumbent on all health organizations to exercise responsible fiscal decision making when allocating their financial resources.
    As the senior cost analyst for a local, nonprofit hospital, you are charged with determining the most appropriate use of financial resources and making recommendations. Your organization is seeking to secure a new CT Scan unit for the expanded emergency department. The hospital has the option of leasing the equipment or purchasing the equipment.
    The cost to purchase the CT scan is $1,300,000 at 10% (PV), with straight line depreciation over 5 years. The trade-in value $130,000 at the end of its useful life. The maintenance expense equals $12,000 annually.
    The cost to lease the equipment is $26,000 per month for a period of 60 months, which includes all maintenance costs. The tables below provide the financial overview of the purchase and lease costs.

    Purchase
    Lease
    Instructions
    In a written case analysis, use the figures provided in the tables to discuss the following:
    • Compare and contrast leasing versus purchasing. You may use the Rasmussen library to research articles addressing lease versus purchase decisions in order to support your assertions.
    • Calculate the figures relative to the principal payment, interest payment, maintenance expense, total expense, and PV expense and complete the tables below.
    • HSA6900 Mod 2 Deliverable Tables.docx
       
    • Provide a detailed explanation of the costs associated with leasing the equipment as depicted in the table.
    • Provide a detailed explanation of the costs associated with purchasing the equipment as depicted in the table.
    • Discuss the potential tax implications of leasing the equipment, assuming that the organization is a nonprofit.
    • Discuss the potential tax implications of purchasing the equipment, assuming that the organization is a nonprofit.
    • Recommend a course of action and the implications that your recommendation may have for the organization.

 

The cost to purchase the CT scan is $1,300,000 at 10% (PV), with straight line depreciation over 5 years. The trade-in value $130,000 at the end of its useful life. The maintenance expense equals $12,000 annually.

The cost to lease the equipment is $26,000 per month for a period of 60 months, which includes all maintenance costs. The tables below provide the financial overview of the purchase and lease costs.

Purchase

Year

Principle Payment

Interest Payment

Maintenance Expense

Total Expense

PV Factor at 10%

PV Expense

1

 

 

 

 

0.909

 

2

 

 

 

 

0.826

 

3

 

 

 

 

0.751

 

4

 

 

 

 

0.683

 

5

 

 

 

 

0.621

 

Trade Value $130,000

 

 

 

 

0.621

 

 

 

 

 

 

 

 

 

Lease

Year

Lease Payment

PV Factor at 10%

PV Expense

1

 

0.909

 

2

 

0.826

 

3

 

0.751

 

4

 

0.683

 

5

 

0.621

 

 

 

 

 

Dot Image
Tutorials for this Question
  1. Tutorial # 00842310 Posted By: wildcraft Posted on: 10/14/2023 04:02 AM
    Puchased By: 2
    Tutorial Preview
    The solution of HSA6900 Deliverable 2 - Lease Versus Purchase...
    Attachments
    HSA6900_Deliverable_2_-_Lease_Versus_Purchase.ZIP (18.96 KB)

Great! We have found the solution of this question!

Whatsapp Lisa