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1 Suncoast Healthcare is planning to acquire a new...

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1 Suncoast Healthcare is planning to acquire a new X-ray machine that cost $200,000. The business can either lease the machine using an operating lease or buy it using a loan from a local bank. Suncoast's balance sheet prior to acquiring the machine is as follows: Current assets $100,000 Debt $400,000 Net fixed assets $900,000 Equity $600,000 Total Assets $1,000,000 Total claims $1,000,000 A ? What is Suncoast's current debt ratio? B ? What would the new debt ratio be if the machine was leased? If it is purchased? C ? Is the financial risk of the business different under the two acquisition alternatives? 2 Big Sky Hospital plans to obtain a new MRI that cost $1.5 million and has an estimated four- year useful life. It can obtain a bank loan for the entire amount and buy the MRI, or it can lease the equipment. Assume that the following facts apply to the decision: The MRI falls into the three-year class for tax depreciation, so the MACRS allowances are .33, .45, .15, and .07 in years 1 through 4, respectively. Estimated maintenance expenses are $75,000 payable at the beginning of each year whether the MRI is leased or purchased. Big Sky's marginal tax rate is 40 percent. The bank loan would have an interest rate of 15 percent. If leased, the lease (rental) payments would be $400,000 payable at the end of each of the next four years. The estimated residual (and salvage) value is $250,000. A ? What are the NAL and IRR of the lease? Interpret each value. B ? Assume now that the salvage value estimate is $300,000, but all other facts remain the same. What is the new NAL? The new IRR? 3 HealthPlan Northwest must install a new $1 million computer to track patient records in its three service areas. It plans to use the computer for all three years, at which time a brand new system will be acquired that will handle both billing and patient records. The company can obtain a 10 percent bank loan to buy the computer, or it can lease the computer for three years. Assume that the following facts apply to the decision: The computer falls into the three-year class for tax depreciation, so the MACRS allowances are .33, .45, .15, and .07 in year 1 through 4 respectively. The company?s marginal tax rate is 34 percent. Tentative lease terms call for payments of $320,000 at the end of each year. The best estimate for the value of the computer after three years of wear and tear is $200,000 A- What are the NAL and IRR of the lease? Interpret each value. B ? Assume now that the bank loan would cost 15 percent, but all other facts remain the same. What is the new NAL? The new IRR? 4 Assume that you have been asked to place a value on the ownership position in Briarwood Hospital. Its projected profit and loss statements and equity reinvestment (asset) requirements are as follows (in millions) : 2012 2013 2014 2015 2016 Net revenue 225.0 240.0 250.0 260.0 275.0 Cash expense 200.0 205.0 210.0 215.0 225.0 Depreciation 11.0 12.0 13.0 14.0 15.0 Earning before interest and taxes (EBIT) 14.0 23.0 27.0 31.0 35.0 Interest 8.0 9.0 9.0 10.0 10.0 Earning before taxes (EBT) 6.0 14.0 18.0 21.0 25.0 Taxes (40 percent) 2.4 5.6 7.2 8.4 10.0 Net profit 3.6 8.4 10.8 12.6 15.0 Asset requirements 6.0 6.0 6.0 6.0 6.0 Bairwood's cost of equity is 16 percent. The best estimate for Briarwood's long-term growth rate is 4 percent. A - What is the equity value of the hospital? B ? Suppose that the expected long-term growth rate was 6 percent. What impact would this change have on the equity value of the business? What if the growth rate were only 2 percent?,I have another question that I submitted to course hero and the person canceled the answer. Can you take a look at the question listed below and the attachement and see if you can help? Let me know if you can answer it or not and then tell me what I need to do to get you paid. Can you tell me if you are going to be able to answer it by tomorrow 6/7/12 at 12:00. I do not need the assignement until Friday the 8th I just need to know if I need to find someone else. Thanks Case Problem ?Stateline Shipping and Transport Company? Read the ?Stateline Shipping and Transport Company? Case Problem. Analyze this case, as follows: 1. In Excel, or other suitable program, develop a model for shipping the waste directly from the 6 plants to the 3 waste disposal sites. Describe and implement the model. 2. Solve the model you developed in #1 (above) and clearly describe the results. 3. In Excel, or other suitable program, Develop a transshipment model in which each of the plants and disposal sites can be used as intermediate points. 4. Solve the model you developed in #3 (above) and clearly describe the results. 5. Interpret the results and draw conclusions that address the question posed in the case problem. What are the limits of the study? Write at least one paragraph. There are two deliverables for this Case Problem, the Excel spreadsheets and an accompanying written description/explanation.,I just submitted this question on a new thread. Please let me know if you will be able to help. If not then please let me know so I can find an alternate source. Thank you!!!!

 

Paper#7309 | Written in 18-Jul-2015

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