90%(10)9 out of 10 people found this document helpful
This preview shows page 4 - 6 out of 6 pages.
vice versa if few lessees and many lessors.KLP 1: The actual lease payment will be influenced by competition Copyright 2014 Health Administration Press
•To compensate for the additional risk, GBF might also include a clause that:•would prohibit cancellation for some period, say two years, and/or•impose a cancellation penalty fee which might decline over time•The decision to include a cancellation clause depends on whether the lessee or the lessor is in a better position to assume the residual value riskKLP 2: A cancellation clause would make the contract more risky for the lessorCopyright 2014 Health Administration Press
•At an expected 100 procedures, the per procedure lease would cost the center $25,000 more than the conventional lease; however, the lessee would be buying volume downside protection•For the lessee, a per procedure lease means less risk but also less expected return. For the lessor, it means more risk but a higher expected returnKLP 3: Per procedure leases change the risk for lessors and lesseesCopyright 2014 Health Administration Press