Assumptions

The hospital only needs to fund the capital equipment, the startup costs are being funded from

existing cash.

The hospital has an S&P credit rating of A that was used to determine interest rates.

The length of a bank loan $($Options A&B$)$ is tied to the useful life of the asset that is being

financed. The items in this project have a variety of useful lives. For this project, we are

assuming an average useful life of $15$ years, so the entire loan will be over $15$ years. In reality,

your bank may require more than one loan, based on the useful life of each different group of

building$/$equipment$.$

Bonds $($Option C$)$ are not restricted by the useful life of the asset they are financing, so they are

able to cover long terms$-20$ years for our project.