Health Care Essay

774 WordsApr 15, 20124 Pages
Capital Budgeting Process Chrystina Health Services Finance April 1, 2012 Organizations that decide to issue bonds generally go through a series of steps. Discuss the six steps. These are the six steps that organizations use when they are issuing bonds. These steps are: 1. “The healthcare borrower updates its capital plan, measures its debt capacity and attempts to get its house in order” (Zelman, McCue, & Glick, 2009) 2. “The healthcare borrower selects key parties involved in the bond issuance” (Zelman, McCue, & Glick, 2009). 3. “The health care borrower is evaluated by a credit rating agency” (Zelman, McCue, & Glick, 2009). 4. “The bond is rated by the credit rating agency” (Zelman, McCue, &…show more content…
For example an x-ray machine could be leased and the organization would a fee depending on how many x-rays they take per month or year. The next type of lease is the financial lease. This lease does not include a maintenance fee and this type of lease is like a rent to own when the lease is paid in full the ownership is transferred to the organization. Discuss the terms short-term borrowing and long-term financing. Short-term borrowing means a loan take out by a person and this loan will be paid back within a short amount of time with a very high interest rate. These types of loans include pay-day loans. They are quick and paid back within a month or weeks. Long-term financing means a financing provided to an organization for a period longer than a year. This is done typically for companies who do not have enough capital or for potential home owners. Mortgages are considered long-term loans. What are the primary sources of equity financing for not-for-profit healthcare organizations? The primary sources of equity financing are from corporations, foundations, individuals and bequests. This money totals in the billions for each organization. The capital budgeting process occurs in several stages, but generally includes what? This includes all the steps included in the capital project analysis. It also includes what monies are going to be spent or saved on projects or programs. Discuss and list

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