Lease Decisions The use of financial resources to ensure health care quality a
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Lease Decisions
The use of financial resources to ensure health care quality and equity is known as health care financing. It is considered an essential part of how well the healthcare system works. A lease is a contract that states this. How much and how long to rent a particular item. There are always two parties to a lease. The owner of the property is the lessor, and the other party is the lessee, who is the buyer or user (Gapenski, 2015).
Types of Leases
Finance leases
are also known as capital leases. Maintenance services are not included in this lease agreement and cannot be terminated. This agreement will usually depend on how long the rental item will last. These rents have been fully amortized. This lease agreement transfers to the lessee the benefits and risks associated with the asset or property.
Operating leases
are also known as service leases. The asset owner gets the assets back after the time of the lease. This lease allows the use of property or equipment without the giving and transfer of ownership rights. This contract gives the buyers a large amount of leverage that they can upgrade whenever they want because this contract contains the cancellatio clause.
Mixed LeasesThis type of lease offers both concepts of a lease. The features of operating and finance leases make this type of lease customizable. In simple words, this lease is a capital lease, but it contains a cancellation clause (Gapenski, 2015).
How is lease is better? Leasing is a good idea because it allows the business to acquire many assets and properties without having to pay the full price upfront. Compared to a loan from a bank or other financial institution, leasing is easier and more convenien
How lease is better Leasing is a good idea because it allows a company to acquire many assets and properties without having to pay the full price up front. Compared to a loan from a bank or other financial institution, leasing is an easier and more attainable term. Leasing makes it possible for assets to be upgraded more easily and reduces the issue of obsolescence. According to (Thornton, 2020) Leasing enables very expensive items to be purchased for a little monthly fee. In the actual world, building healthcare facilities and purchasing the necessary property are expensive and need significant investment. The infrastructure for healthcare institutions can be built with the aid of leasing. Leasing is a solution for overcoming financial and capital investment challenges.
Evaluating the leases To maximize benefits,
both parties assess the leasing agreement. The important factors that must be taken into account when negotiating a lease: The lessee should determine whether leasing is a more affordable choice than purchasing the asset. If the lease payments are sufficient to produce a profitable rate of return, the lessor should be taken into account. Investment risk needs to be assessed. When both parties consider the leasing from a theoretical standpoint, there is always some ambiguity (Azmi, 2022).
References: Azmi, F. (2022). Legal Analysis Of The Lease Agreement. International Asia of Law and Money Laundering (LAML), 1(3), 202-206. https://iaml.or.id/index.php/home/article/view/35 Gapenski, L. (2015, March 1). Understanding Healthcare Financial Management, Seventh Edition (Alpha/Hap Book) (7th ed.). Health Administration Press. Thornton, D. (2020, October). Understand Your Options Before You Sign Your Lease Renewal – ProQuest. www.proquest.com. https://www.proquest.com/openview/74c0f15f50b2aa4c…
