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Unformatted text preview: for $725,000. This purchase would require United Hospital to debt-finance this equipment. It anticipates a bank loan initial down payment of $125,000 and a three-year term loan at 16 percent with equal principal payments. The resid the equipment at year 5 is estimated to be $225,000. The lease is treated as an operating lease. Depreciation is ca straight-line basis. Assuming a discount rate of 14 percent, what financing option should United Hospital select? As there is no reimbursement of capital costs.- 627,524) less than that of leased. of tax is not given e terms are: to be rization unit n with an idual value of alculated on a ssume that...
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This note was uploaded on 05/10/2011 for the course STATS 202 taught by Professor Emil during the Spring '11 term at Aberystwyth University.
- Spring '11