In the late 1990s, the National Railroad Passenger Corporation (Amtrak) faced a rude awakening as the Congress stipulated that it eliminate its dependence on federal subsidies by 2002. In response to the railway has developed a plan for self-sufficiency, the central of which was a new high-speed passenger service, which he hopes will boost revenue enough to make the rail-sufficient by 2002. To launch this new service, the railway needed to buy $ 750 million in new locomotives and trains in 1999. Three alternatives can be used to finance the purchase of a debt financing, lease financing, or dependence on federal sources. The case starts with Amtrak's chief financial officer instructing its employees in April 1999 to address debt, lease proposal, which has just been submitted to BNY Capital Funding LLC. If goal is to familiarize students with the financial leasing as an alternative financing, explore the lease-versus-buy decision and the conditions under which financial leasing arrangements sense and exercise skills in the assessment of financial leasing.
This Darden study. "Hide
by Robert F. Bruner, Jessica Chan Source: Darden School of Business 11 pages. Publication Date: January 28, 2002. Prod. #: UV0093-PDF-ENG
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