...SOLUTIONS Multiple Choice Questions: 1. Which of the following statements about finance, accounting, and financial management is most correct? a. Accounting is of no value in decision making. b. Accounting provides the theory and concepts necessary to help managers make better decisions. c. Financial management involves the measurement, in financial terms, of operational events that affect the resources and financing of an organization. d. The primary role of finance is to plan for, acquire, and use resources to maximize the efficiency and value of the enterprise. e. Financial management is of no value in decision making. 2. Which of the following statements about the role of finance in healthcare organizations is incorrect? a. Over time, the finance function has become increasingly focused on strategic issues, such as joint venture decisions. b. Today, the most critical finance function is cost identification. c. The finance function often supports cost containment efforts and third-party payer contract negotiations. d. The primary activities of the finance function can be summarized by the four Cs: costs, cash, capital, and control. e. In times of high profitability and abundant financial resources, the finance function tends to decline in importance. 3. Which of the following is not a hypothesized benefit of integrated delivery systems? a. Information systems that track all aspects of patient care can be developed more easily. b. Integrated...
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...Finance Course: Health Care Finance Readings MBAHC−4 California College for Health Sciences MBA Health Care Program McGraw-Hill/Irwin abc McGraw−Hill Primis ISBN: 0−390−55313−1 Text: Advanced Financial Accounting, Sixth Edition Baker−Lembke−King Harvard Business School Accounting Cases Corporate Finance, Seventh Edition Ross−Westerfield−Jaffe Harvard Business Review General Management Articles Harvard Business School Finance Cases This book was printed on recycled paper. Finance http://www.mhhe.com/primis/online/ Copyright ©2005 by The McGraw−Hill Companies, Inc. All rights reserved. Printed in the United States of America. Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without prior written permission of the publisher. This McGraw−Hill Primis text may include materials submitted to McGraw−Hill for publication by the instructor of this course. The instructor is solely responsible for the editorial content of such materials. 111 FINAGEN ISBN: 0−390−55313−1 Finance Contents Ross−Westerfield−Jaffe • Corporate Finance, Seventh Edition I. Overview 1 1 20 34 34 69 97 129 151 151 192 192 214 214 248 1. Introduction to Corporate Finance 2. Accounting Statements and Cash Flow II. Value and Capital Budgeting 4. Net Present Value 5. How to Value Bonds and Stocks 7. Net Present Value and...
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...HEALTH AND SOCIAL CARE QCF: Level 5 Diploma in Leadership for Health and Social Care and Children and Young People’s Services (England) Unit CU 2953 Manage Finance within own area of Responsibility in Health and Social Care or Children and Young People’s Settings This workbook meets the following assessment criteria for unit CU : Written questions Please answer the following written questions: CU2953 - 1.2 Outline sources of funding that are used to construct the budget for your own work setting All residents living in our home are council funded also they get Disability living allowance which is used towards their daily expenses like lunches out , shopping for clothes, paying for transport. CU2953 - 1.3 Outline the roles, responsibilities and accountability of all those involved in financial management of the budget for own work setting The person in charge of the finances is the proprietor and we agree on a weekly budget for food for the home as well as household items, after is my responsibility to ensure the budget is used effectively within the home and all money spent are accurately accounted for, money coming in to the house are registered in and out through a cash file which is maintained by my senior team and I check on a regular basis . Residents personal finances are monitored by their keyworkers and I check them regularly, keyworkers and myself will review spending monthly to ensure residents are safeguarded and all expenses...
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...Reporting Practices and Ethical Standards in Health Care Finance Ashley Riggs HCS 405 February 6, 2012 Jay Christensen Reporting Practices and Ethical Standards in Health Care Finance Healthcare managers engage in many important roles to create and sustain successful organizations. Managers must understand the crucial elements of financial management and the generally accepted accounting principles. They must also understand, adhere to, and enforce the general financial ethical standards. Four Elements of Financial Management Planning The first step in financial management is planning. It is the responsibility of the financial manager to first identify the goals of the company. Then it is the financial manager’s responsibility to decide on the appropriate steps that must be taken to accomplish the goals of the company. Controlling The second step in financial management is controlling. During this phase of financial management, it is the responsibility of the financial manager to ensure that each division of the organization is following the plans was decided. Managers should study current reports and compare them with earlier reports. This will help to decide what division of the organization needs the most attention. Organizing and directing The third step in financial management is organizing and directing. During organization, it is the responsibility of the financial manager to decide how to use the resources of the organization most effectively. The resources...
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...Reporting Practices and ethical Standards in Health Care Finances University of Phoenix HCS 405 Health Care Financial Accounting July 11, 2012 Reporting Practices and Ethics The financial management of health care organizations have the obligation to integrate financial reporting practices with ethical standards that directly reflects and affects health care patients, providers, policymakers, and the society. This paper will review articles that reflect ethical standard practices related to health care financial management and will cover the four financial management elements crucial to the health care organization. These four elements of financial management are the generally accepted accounting principles (GAAP), which are the planning, controlling, organizing and directing, and the decision-making (Baker & Baker, 2011). Planning The financial manager determines the short term and long-term objectives of the organization to create plans to meet organization’s objectives. When planning, the goal of the financial manager is to develop and outline strategies, to seek the input of everyone involved in the process and to ensure everyone supports, and understands their role in the execution the plan. Controlling The purposes the financial officers of controlling are to implement the plans, and are executed by organizational standards to avoid overspending the organization’s budget. Additionally, the financial manager oversee that...
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...The United States spends more on health care than any other country in the world. The current level of national health care expenditures is astounding. “In 2011, the anticipated total of health care government spending in the United States is 1108.2 billion dollars” (Chantrill, n.d.). Health care spending has increased over the past few years; in 1996 $396.78 billion was spent on health care in 2000 $469.80 billion was spent on health care, and in 2009 $989.65 billion was spent on for treatment (Chantrill, n.d.). Between 1996 and 2009, a period of 13 years, health care spending rose to $592.87 billion dollars. I have learned that the current level of health care spending cannot continue the way it is, or the United States is going to go bankrupt. The current level of health care spending is at an all-time high. This is the one particular reason why the Obamacare came into play. For the most part, it was to save money. The level of national health care expenditures is considerably high in comparison to any other region across the world. “Health spending in the United States is much higher than in other countries – at least $2,535 dollars, or 51% higher than Norway, the next largest per capita spender” (Kaiser Family Foundation, 2011, para. 3). In addition in 2009 the United States spent more than 17% of its gross domestic product on healthcare, which is higher than any other developed nation in the world. The Congressional Budget Office (CBO) predicts “that, without any revolutions...
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...HADM 4830: Comparative Health Care Finance T.R. Reid’s book The Healing of America is about finding better, fairer and cheaper quality care around the world. The author takes trips to other countries to compare their health care system to the one we have here in the United States. He uses an arm injury that he suffered years ago to measure the quality of care that he would be receiving in each country, even though he has already gone to a physician one before to receive care. His intent is not only to compare and contrast the health care systems, but he also wanted to know how these health care systems came about and where and who these countries are researching after to better improve their health care systems. The author also wanted to use this experience to help shed light on major differences between the United States health care system compared to others as well as the reason behind it. With this goal in place, T.R. Reid was able to visit the following countries, France, Germany, Japan, United Kingdom, and Canada, and discovered information that can shed light on what an health care system is and is not suppose to be. In the remainder of this paper I will cover the different health care systems in France, Germany, and Japan because those countries were most intriguing to me. I choose those three countries because I felt that those are very large countries and it would be interesting to see how the compare next to the health care system in the United States. Also...
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...Title Page Introduction a. Global Health Issues b. Economic Impact Behavioral Finance a. Emotional Biases i. Risk Aversion ii. Regret Aversion Market Implications a. Every market in today’s economy was impacted either directly or indirectly by the SARS epidemic. i. Most saw measurable decreases in GDP b. Global cost of lost economic activity due to SARS was approximately $54 billion Conclusion a. Economic damage caused by SARS can be attributed to the behavioral finance emotional biases of loss aversion and regret aversion affecting investors globally. Global Health Issues, Behavioral Finance and the Markets: The Role of Behavioral Finance in how Global Health Issues Impact the Economy Jonathan Davis David A Kennedy Lee V Smith Tayler T Young Syed Zain T Zaidi November 10, 2015 University of Houston- Downtown Global Health Issues, Behavioral Finance and the Markets: The Role of Behavioral Finance in how Global Health Issues Impact the Economy With globalization on the rise, infectious diseases that appear in one country have the opportunity to spread rapidly to others. Recent examples include the 2003 outbreak of Severe Acute Respiratory Syndrome (SARS) and the 2014 outbreak of the Ebola virus. According to the World Health Organization (WHO), 8,098 individuals became infected worldwide with SARS and 774 of those individuals ultimately died from the illness (CDC, 2005). While Ebola killed 5,160 out of the 14,098 people...
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... 1(2), 17-25, April-June 2011 17 The Politics of Health Finance Reform in Hong Kong Raymond K. H. Chan, City University of Hong Kong, Hong Kong ABSTRACT Since the late 1950s, Hong Kong’s public health services have increased. They are mainly funded by taxes, supplemented by minimal user fees. In the late 1980s, the government recognized the limitations of this financing model and subsequently proposed alternative methods of funding. Their proposals have been rejected by various stakeholders, who represented different, and even conflicting, values and interests. This paper describes the development of health services and the debates that have surrounded health financing since the late 1980s. It shows that the health finance debate in Hong Kong is not a simple issue that can be tackled by rational planning; instead, it is a complex consequence of welfare politics in an increasingly mobilized society. Keywords: Health Finance, Health Policy, Health Services, Hong Kong, Public Health Services INTRODUCTION The earliest public health services in Hong Kong were mainly devoted to combating communicable diseases. As the government was largely unresponsive to demands for further services, the gap in provision was filled by traditional Chinese medical practitioners and hospitals operated by local philanthropic organizations. It was not until the late 1950s that the government expanded its role and investment in health care. During the past five decades, a system of service...
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...1. What is the difference between simple interest and compound interest? Simple Interest only calculates the interest on the principal in each period. Compound interest calculates the future value of money in which interest is calculated on the cumulative principal and interest earned up to that point. 2. What is the future value of $10,000 for an interest rate of 16% and 1 annual period of compounding? for an annual interest rate of 16% and 2 semiannual periods of compounding? for an annual interest rate of 16% and 4 quarterly periods of compounding? The future value of $10,000 with an interest rate of 16% and 1 annual period of compounding is $11,600.00. The future value of $10,000 with an interest rate of 16% and 2 semiannual periods compounding is $11,664.00. The future value of $10,000 with an interest rate of 16% and 4 quarterly periods compounding is $11,698.59. 3. Define an annuity. A series of equal cash flows made or received at regular time intervals. 4. Define an ordinary annuity. A series of payments made or received at the end of each period. 5. Define an annuity due. An annuity with n payments, where the first payment is made at time t = 0, and the last payment is made at time t = n - 1. 6. In the future value annuity table at any interest rate for 1 year, why is the future value interest factor of this annuity equal to 1.00? In a future value annuity table at any interest rate for 1 year, the future value interest factor...
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...Finance Assignment III: Chapter 5 1. Explain the differences between fixed costs, semi fixed costs and variable costs The differences between fixed costs, semi-fixed costs and variable costs has to do with the amount of services provided. Variable costs are cost that are expected to increase and decreases with volume (patient’s days, number of visits, etc...). Fixed costs are costs expected to remain constant regardless of volume. Semi-fixed costs are those that are fixed with in ranges that are less than the relevant range. 2. Total Costs are made up of what components? Total costs are made up of two components fixed costs + variable costs 8. What are the Critical Differences in profit analysis when conducted in a capitated environment versus a fee-for-service environment? In the fee-for service graph the total revenues line is sloping upwards. However, in a capitated environment, the total revenues line is horizontal, which shows that total revenue is the same number regardless of volume as measured by the number of visits. Under capitation, revenue is being driven by the insurance contract (I.e., by the premium payment and the number of covered lives, or enrollees). This change in the revenue source is the core of the logic switch from fee-for-service to capitation; the clinic is being rewarded to manage the healthcare of the population served rather than merely to provide services. 10. a. What cost structure is best when a provider is primarily...
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...Chapter 9 Notes: * Intro * The value of any asset (stocks, equipment) is based on future cash flows * The dollar to be received in the future is worth less than the current dollar, because the current dollar can be invested into an interest bearing account and be worth more in the future vs. the future dollar * time value analysis: is the process of assigning appropriate values to cash flows that occur at different points in time * Time lines * Starts with 0 * If you invest 100 into a business it would be shown as -100 at 0 because you have cash flowing out * Time value of a lump sum (compounding) * The process of going from todays valyes (present values (PV)) to future values is called compounding. * Lump sum compounding starts with a single starting amount. * Terms used in analysis: * PV=beginning amount * I=interest rate (in decimal) * INT=dollars of interest earning uring a year, which equals the beginningaount multipled by the interst rate (INT=PV*I) * FVn=Future value, or ending amount, of the account at the end of N years. (FVn=PV+INT) or (FVn=PV +(PV*I) or (PV*(1+i)^X) * N=number of years involved in the analysis * Opportunity costs * Essentially what you give up to get something else (ex. Invest in stocks with tesla, then u give up the opportunity to invest in apple) * The opportunity cost (discount rate) applied to investment...
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...The Northeast Health Council, INC was established in 1993 to meet the primary healthcare needs of the residents of the Northeast through a not-for-profit community-responsible approach. A nonprofit analysis helps nonprofit executives and board members understand their organization’s underlying fiscal health and readiness for change and growth. The analysis is a critical tool for Northeast Health Council planning for program expansion, organizational restructuring and/or realignment, financial and fundraising challenges, new executive and board leadership, a new capital project, or acquisition or merger with another nonprofit organization (such as the local health clinic). The Northeast Health Council’s analysis helps its executives and board members to understand the underlying financial trends and characteristics of their organization, including revenue composition and growth, expense composition and trends, balance sheet composition, and key ratios. It helps to assess the alignment of the organization’s current financial structure with change; predict the impact of proposed changes on the organization’s future growth, sustainability, and survival; Use financial planning and management tools, such as annual/monthly cash flow projections, budgets of revenue and expenditures versus actual reports, to inform strategic decision making; establish benchmarks for program productivity, financial performance and organization-wide fiscal health. Additionally, the analysis is a powerful...
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...Problem 2.2 A firm that owns the stock of another corporation does not have to pay taxes on the entire amount of dividends received. In general, only 30 percent of the dividends received by one corporation from another are taxable. The reason for this tax law feature is to mitigate the effect of triple taxation, which occurs when earnings are first taxed at one firm, then its dividends paid to a second firm are taxed again, and finally the dividends paid to stockholders by the second firm are taxed yet again. Assume that a firm with a 35 percent tax rate receives $100,000 in dividends from another corporation. What taxes must be paid on this dividend, and what is the after-tax amount of the dividend? (Gapenski, pg. 62). Important information: 30 percent of dividends received are taxable 35 percent = firm’s tax rate $100,000 in dividends from another corporation Total amount of dividends: $100,000 Tax Exempt Total: 100%-30% = 70% 70% of 100, 000 = 70,000 Total Taxable Funds: $100,000- $70,000 = $30,000 Taxes (35%): $30,000*0.35 = $10,500 After Tax Income: $30,000-10,500 = $19,500 Tax Exempt: 100%-30%= 70% = 100,000-30,000=70,000 After-tax total amount: $19,500 + $70,000 = $89,500 Problem 2.4 Jane Smith currently holds tax-exempt bonds of Good Samaritan Healthcare that pay 7 percent interest. She is in the 40 percent tax bracket. Her broker wants her to buy some Beverly Enterprises taxable bonds that will be issued next week. With all else the...
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... Money the organization spends to maintain and grow operations is called: Selected Answer: Expenses Answers: Liabilities Assets Revenue Expenses Question 5 0 out of 20 points A laboratory purchases a microscope, on credit, for $50,000. The result would be an increase of $50,000 in _________________ and an increase of $50,000 in ____________________. Selected Answer: Liabilities, Equity Answers: Assets, Equity Assets, Liabilities Liabilities, Equity Assets, Equity Question 1 | | | Which of the following is the primary goal of a not-for-profit healthcare organization? | | | | | Selected Answer: | To serve the community throught he provision of health care services. | | | | | Question 2 | | | Washington County Hospital has the lowest cost of any hospital in its region. However, it has continually reported very large operating losses and has depended on support from the county. Assuming that positive operating margins are an objective of...
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