Health Care Finance Assignment Please read through carefully and make you you understand fully before sending proposal. I need an A. Make sure you have access to the book. Book: Health Care Finance: B

Exercise Chapter 23

What are the definitions of the following terms?

1. Financial Lease

Financing lease is a formal agreement or contract to purchase of equipment. Example of financial lease include contract to purchase a machine or office furniture.

1. Depreciation

Depreciation is the expensing of an asset involved in producing revenue throughout its useful life. Depreciation is the systematic allocation of fixed assets over its useful life. Examples of assets costs that can be written off over a number of years include manufacturing equipment, building, vehicles, and computer system and office furniture.

1. Operating Lease

Operating lease is a contract that allow for the use of an asset but does not convey ownership right of the assets. Operating lease is considered expenses of current operation. For example, a firm can use property, plant and equipment such as computer without owning the assets.

1. Briefly describe what Purchasing Equipment means.

Purchasing equipment mean taking title to or assuming ownership of the item. The purchase of the equipment can take place though paying in cash from cash reserve or the organization can finance all or part of the asset. For example a firm can purchase computer and computer machines and assume ownership. The liability of maintaining this equipment is sole responsibility of the company.