Transcript

The Escalator Nobody Argues About · Medsolve Dynamics

Yoel Bakas: On a $4.1 million dollar contract, a service contract runs a little over five percent a year. So call it $215,000 in one year. It's not super aggressive, that's about standard. So here's my question. In five years, how much do you pay? For those of you that just multiplied 215 times 5, you'd be wrong. The actual answer is not 1,075,000. The answer is 1.19 million. And that's a difference of $113,000. That $113,000 is the escalator. It's 5% a year that's compounded. On a contract that nobody opened and nobody approved that $113,000. Nobody had a meeting about it. It just happened. And that's one machine.