Review the chart below about multiple options for financing the trauma center: Location Costs (based on 1500
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Question:
- Review the chart below about multiple options for financing the trauma center:
Location Costs (based on 1500 sq.ft.) | |
Buy | Lease |
$250,000 purchase price with a 4.5% interest over 25 years, with 20% of the total cost as the down payment | $3,000 a month for a 10-year lease with a $25,000 deposit |
$250,000 purchase price with a 6% interest over 15 years, with 30% of the total cost as the down payment | $3,225 a month for a 5-year lease with a $15,000 deposit |
Equipment | ||
Name and Quantity | Cost to Rent (per month) | Cost to Purchase |
1 Mobile X-ray unit | $7,000 | $700,000 |
2 Anaesthetic machines | $8,000 | $800,000 |
2 Defibrillators | $800 | $80,000 |
4 ECG Monitors | $2,000 | $200,000 |
1 Laryngoscope | $400 | $40,000 |
4 Vital Signs Monitors | $120 | $12,000 |
- Imagine that you have a budget of $6,000,000 for the initial setup of the center. Create a financial plan on how you would utilize this money to create the trauma center.
- Would you lease or buy your space?
- Would you buy or rent your equipment?
- Explain your reasoning for the decisions you made and why they make the most sense financially.
Related Book For
Managerial Decision Modeling with Spreadsheets
ISBN: 978-0136115830
3rd edition
Authors: Nagraj Balakrishnan, Barry Render, Jr. Ralph M. Stair
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