You are a hospital administrator trying to raise capital to refurbish the hospital. Your local bank is
Question:
You are a hospital administrator trying to raise capital to refurbish the hospital. Your local bank is reluctant to lend to you because you already have a large mortgage on the property on which the hospital complex lies. But your bankers tell you that they can lend you more if you reduce your debt by selling your parking lot to some private investors who’ll lease it back to you for the next 50 years. And you’ll have to renegotiate the price of the lease every 5 years. What concerns might you have about this sale-and-lease-back contract?
Step by Step Answer:
The contract has no real effect on your finances because it replaces i...View the full answer
Managerial Economics A Problem-Solving Approach
ISBN: b00btm8fk0
2nd Edition
Authors: Luke M. Froeb, Brain T. Mccann
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