Organizations that decide to issue bonds typically go through a series of steps. Discuss the six steps. In the healthcare sector, organizations that decide to issue bonds generally follow the following steps: Step 1: The issuer decides the type of bond to issue and how to organize the issuance. The issuer then prepares for the issuing process. Step 2: A credit rating agency rates the healthcare institution. Step 3: A bond rating agency then rates the bond based on its terms and value. Step 4: The healthcare provider offers a lease to a government agency through a trustee. Step 5: The government agency delivers the lease to one or more investors. Step 6: The bond is sold to the investor and the trustee gives the issuer the net proceeds (Zelman, 2003). An alternative to traditional equity and debt financing is leasing. For what purposes is leasing mainly carried out? Healthcare is a capital-intensive business, and most healthcare institutions survive on traditional equity and debt financing. Healthcare institutions consider leasing for various reasons: to avoid the lengthy process of capital budget requests, to avoid technology delays, to benefit from maintenance services and for convenience. Discuss the two main types of leasing. There are two main types of leasing: operating and capital. An operating lease involves the rental of service equipment for periods shorter than the fiscal life of the equipment. Operating leases are used for short-term leasing and technology assets. Capital goods involve the leasing of an asset or equipment for its entire economic life. Capital leases are used for long-term leasing and for equipment that cannot become technologically obsolete (Zelman, 2003). Discuss the terms short term loan...... middle of paper...... budget decisions, businesses You need to take time to plan (Brown, 1992). Discuss and list the three methods of discounted cash flow. Discounted cash flow is a valuation technique that discounts expected cash inflows and outflows to evaluate the potential value of an investment. There are three methods of discounting cash flow: net present value (NPV), profitability ratio (PI), and internal rate of return (IRR). Net present value discounts all cash inflows and outflows at a minimum rate of return, which is usually the cost of capital. Profitability ratio refers to the ratio between the present value of cash inflows and the present value of cash outflows. The internal rate of return refers to the interest rate that discounts projected cash inflows to the present to ensure that the present value of cash inflows is equivalent to the present value of cash outflows (Brown, 1992).