Finance for Healthcare

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Date Submitted: 11/20/2012 07:36 AM

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Multiple Choice (5 @ 6 points = 30)

1. What is net working capital?

a. Current assets less long-term liabilities

b. Current assets less current liabilities

c. The amount of permanent financing required to finance working capital or current assets.

d. Both A and C

e. Both B and C

2. Which of the following is most directly related to strategic financial planning?

f. ROI

g. ROE

h. EVA

i. None of the above

3. Which of the following best describes “days in accounts receivable?”

a. a profitability ratio that measures how quickly an organization generates revenue

b. a liquidity ratio that estimates how quickly an organization converts receivables to cash

c. a liquidity ratio that measures how long it takes an organization to pay its bills

d. profitability ratio that evaluates credit and collection policies

4. Which one of the following is not one of the four basic financial statements?

a. Balance sheet

b. Income statement (or statement of operations for a not-for-profit firm)

c. Accounts Payable Statement

d. Statement of changes in owners’ equity (or statement of changes in net assets for a not-for-profit firm)

e. Statement of cash flows

5. Which of the following statements is false?

a. A point of service plan is a hybrid form of an HMO

b. HMO plans usually have physician gatekeepers that serve to direct and manage patient care.

c. Traditional indemnity plans restrict which physicians can be seen

d. D. A PPO usually reduces payments for patients who go out of network.

Short Answer (4 @ 20 points = 80)

6. What are the primary responsibilities of the financial manager?

The primary responsibilities of financial manager are:

• Ensuring the profit maximization of the company

• Maximizing the share price of the company

7. What are the three primary forms of legal business...