Findling Hospital is planning a major expansion project. The construction cost of the project is to be
Question:
Findling Hospital is planning a major expansion project. The construction cost of the project is to be paid from the proceeds of serial notes. The notes are of equal amounts and include a provision for interest at an annual rate of 8% payable semiannually over the next 10 years. It is expected that receipts from the hospital will provide for the repayment of principal and interest on the notes. Allan Klein, controller of the hospital, has estimated that the cash flow available for repayment of principal and interest will be $450,000 per year. The construction project is expected to cost $3,420,000. Can the hospital meet the peak debt service with existing cash flows?
Step by Step Answer:
Essentials Of Health Care Finance
ISBN: 9781284094633
8th Edition
Authors: William O. Cleverley, James O. Cleverley