Issues When Selecting Financial Arrangements

Because strategic issues can be important when selecting financial arrangements, the facility manager should include them in the selection process. The following questions can help assess a facility manager's needs.

in the private sector, the facility manager should decide whether the project should be on or off the balance sheet. An off-balance sheet preference would lead back to the "true lease." If the facility manager wants the project's assets on the balance sheet, the Net Present Value (or other economic benefit indicator) can help determine which "host-managed" arrangement (loan, capital lease or cash) would be most lucrative.

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