Category #1
Activities that take place before, during and after services are provide are referred to as:
Revenue Cycle
When you make a decision between two courses of action, you should only consider which kinds of costs.
Differential costs
This is not an example of a kind of debt
Company Stock
The NPV of a project is expressed A in dollar terms, B As a percentage, C As a ratio, D As one of the three discrete categories (ie., good, fair or poor.
A in dollar terms
The main different in capital and operating budgets is that: A Capital projects deal only with construction of buildings in state governmental centers.B Operating projects require investors to purchase something now which is expected to generate profits in the future. In capital projects, profits increase in the same year that the project’s expense occur. C Capital projects require investors to purchase something now which is expected to generate profits in the future. In operating projects, profits increase in the same year that the project’s expenses occur. D There is no difference in capital and operating budgets. The two words are synonyms.
C Capital projects require investors to purchase something now which is expected to generate profits in the future. In operating projects, profits increase in the same year that the project’s expenses occur.
The average number of days it takes a healthcare organization to collect payment from its patients (and their insurers).
The Average Collection Period (ACP)
Suppose you run a physician practice with the following cost characteristics. Fixed cost = $100 Per visit variable cost = $2 Number of visits the practice plans to offer – 200
What is the total cost?
Number of Visits x Variable Cost
200 x 2 = 400
Variable cost total + fixed cost
400 + 100 = $500.00
Generates returns for equity holder in the form of a “residual claim” on the business ‘earnings and through dividend payments.
Equity
In theory, companies should accept all projects that have…A An NVP less than zero B An IRR greater than zero C An IRR greater than the cost of capital D An NPV greater than the cost of capital
C An IRR greater than the cost of capital
The IRR of a project is expressed ….A In dollar terms B As a percentage C As a ratio D As one of the three discrete categories (i.e., good, fair or poor)
B As a percentage
Because cash is a non-earning asset, interest rates on checking accounts are low or zero and funds in checking accounts aren't being invested in business projects, refers to
Why wouldn't a company want to keep all the cash it possibly can in its checking accounts.
8 Suppose you run a physician practice with the following cost characteristics. Fixed cost= $100 Per visit variable cost = $2 Price: $5
What is your breakeven number of visits.
Fixed Costs/price per unit-variable cost per visit
100/5.00-2.00
100/3 = 33.33
33/34 visits
Suppose you start a business making baked goods. To get the business off the ground you invest $100 of your own money to purchase cake and muffin pans. These pans are owned by the business, and you haven’t defined specific repayment terms. Is your $100 investment
An equity investment
When determining what cash flows a project will produce, it is important to include: A Only incremental (or marginal) cash flows B All cash flows including those that the organization would have even if they didn’t take on the project. C Cash flows used to fund sunk costs D Only positive cash flows
A Only incremental (or marginal) cash flows
There are several excel functions, which one of the following would you use to determine the dollar terms of a project. A SUM B NPV C IRR D PMT
B NPV
The greater length of say leads to greater costs without any increase in revenue, refers to:
Average Length of Stay (ALOS) metric
You have an open room in the clinic. You’re considering either renting the room to United Way, who will reimburse you 4300 per month in rent, or converting the room to a dental exam room so you can offer dental care. If you’re leaning towards converting the room to a dental exam room, the 4300 in rent that United Way offered you can be considered:
Opportunity Cost
The weighted average cost of capital represents.
The interest rate on equity only.
Sensitivity analysis involves…A Changing multiple assumptions, all at the same time, to examine the effects of scenarios that may occur B Creating good, likely, and bad scenarios and finding the financial impact of a project associated with each one. C Changing individual assumptions one at a time to see which have the biggest effect of a project’s returns D Prodding the financial analyst of a project about all their assumptions to see which ones the analyst is least confident in.
C Changing individual assumptions one at a time to see which have the biggest effect of a project’s returns
Which of the following is the process of finding the present value of an amount or series of cash flows expected to be received in the future. A Discounting B Financial Asset C Accounts Receivable D Direct Method
A Discounting
You run a clinic providing health care services to uninsured and underinsured individuals. Each month you have to pay rent on the building that houses the clinic. Next year, you expect far more visits that you had this year. As you are planning costs for next year, clinic rent will most likely be:
Fixed costs
This refers to something you measure already that can help you estimate how much of a shared resource a product or department uses.
Cost Driver
What is not a measure of the return that a capital project generates. A AMR (actual money return) B IRR (internal rate of return) C NPV (net present value)
If a company is capital constrained (i.e. doesn’t have the funds to invest in all profitable projects) it should A Invest in the project with the single highest NPV B Plan to invest in all positive NPV projects hoping that the money to fund these will come from somewhere C Not invest in any projects and save up for later D Invest in the projects with the highest combined NPV
D Invest in the projects with the highest combined NPV