Question

1. Under service fee-for-service agreement, the incentive is to increase patient utilization to boost profitability, while undercapitalization; the incentives are to increase the number of members in the covered population but decrease per member utilization to increase profitability. True or false

2. The break-even point (Volume) can be calculated using this equation: (price x Volume)- (variable cost rate x volume)= fixed costs. True or false.

3. Best care hospital has a net income of $1,218,000. Its total assets are $9,869,000. The industry average for return on assets (ROA) is 8%. Based on the given data. Which of the following statement is most correct?

A. Best care is collecting its receivables somewhat slower than the average hospital

B. Best care is doing appreciably better than the industry average regarding asset utilization

C. The average hospital has greater profitability than does best care

D. The industry average hospital is better than best care regarding asset utilization.

4. Green valley hospital has current assets of $3,945,000 and current liabilities of $3,456,000. The industry average for current ratio is 1.3. Based on the given data, which of the following statements is most correct?

A. Green valley has slightly greater liquidity than the average hospital.

B. The industry average hospital has greater profitability than green valley

C. Green valley is not doing as good a job of collecting its receivables as does the average hospital.

D. The industry average hospital is slightly more liquid than green valley.

5. Carter health systems total margin was 5.4%. Its total revenues were $4,000,000 on total assets of $2,000,000. The value of its debt and equity financing were $800,000 and $1,200,000., respectively. What was carters return on equity (ROE)?

A. 13.8%,

B. 3.3%,

C. 6.5%,

D. 18.0%

Answer 1