AN OPERATIONAL APPROACH TO THE EVALUATION OF LEASES BY HOSPITALS

Aharon R. Ofer*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract

The evaluation of the lease versus purchase alternative by not‐for‐profit hospitals presents a problem that stems from the interaction between investment and financial decisions. This paper provides an analytical framework that resolves this issue by neutralizing the impact of the lease contract on the hospital's financial structure and debt capacity. The formulation incorporates the special operating characteristics of not‐for‐profit hospitals: namely, they are not subject to federal income tax, and part of their revenue is generated through cost‐based reimbursement.

Original languageEnglish (US)
Pages (from-to)258-267
Number of pages10
JournalDecision Sciences
Volume10
Issue number2
DOIs
StatePublished - Apr 1979

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Strategy and Management
  • Information Systems and Management
  • Management of Technology and Innovation

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