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    Lease or Buy - Healthcare Equipment

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    What are some of the pros & cons of leasing vs. buying equipment. When is it better to lease or buy healthcare equipment?

    © BrainMass Inc. brainmass.com October 9, 2019, 11:54 pm ad1c9bdddf
    https://brainmass.com/business/capital-budgeting/lease-or-buy-healthcare-equipment-272002

    Solution Preview

    Healthcare Firms struggles over whether to buy or lease equipment. Purchasing is the traditional method of acquiring equipment, leasing often can be more cost-effective. Conducting an analysis on lease-versus-purchase can help to arrive at the most cost-effective decision. Whether to lease or buy medical equipment is not always a clear-cut decision.
    The pressure to reduce healthcare delivery costs, however, has made more stringent reviews of capital equipment acquisitions for Healthcare Industry. As a result, more firms will choose to lease medical equipment. The advantages of leasing include flexibility, convenience, and protection against technological obsolescence. And, in many cases, leasing can be more affordable than purchasing, this considering high development in field of science & technology.

    Decision Factors

    1. Analysis - Capital equipment acquisitions needs to go beyond a simple return on investment (ROI) and consider some other factors, including the estimated technological life of the equipment and the firm's financial position.

    2. Technology - The ...

    Solution Summary

    Healthcare Firms struggles over whether to buy or lease equipment. Purchasing is the traditional method of acquiring equipment, leasing often can be more cost-effective. Conducting an analysis on lease-versus-purchase can help to arrive at the most cost-effective decision. By analyzing the available alternatives & the opportunity cost, firms can make well informed decisions on the optimum use of their available resources to accomplish their objective and goals.

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