Norwest Corporation and Subsidiaries - Page 71

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          of the equipment's cost. But, in fact, the equipment's residual             
          values generally exceeded the amounts projected.41                          
               FIA converted the equipment's residual value into cash at the          
          end of the lease in a number of ways:  Sale or renewal of the               
          lease to the original lessee; sale or lease to another, generally           
          smaller, hospital; or return of the equipment to the manufacturer           
          as a trade-in. FIA's experience was that 85 to 90 percent of the            
          equipment was purchased or released by the original lessee.  In             
          this regard, approximately 70 to 80 percent of the leases were              
          renewed, which was more profitable for FIA than a sale of the               
          equipment to the original lessee or a sale or lease to another              
          hospital.                                                                   
               The amount of revenue that FIA could earn after the lease              
          expiration depended largely on the residual value  of  the                  
          equipment.  The residual value of the equipment was the source for          
          over two-thirds of FIA's cash-flow before expenses and represented          
          the principal source of FIA's profit.  Thus, the equipment's                
          residual value was the key to FIA's business.                               
               B. Federal's Acquisition of FIA                                        
               Commercial Federal Corp. (Federal), the holding company of             
          Commercial Federal Savings & Loan Association (CFSLA), was one of           


               41   Through Dec. 31, 1987, FIA achieved gains of 29 percent           
          over book residual values.                                                  






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