Question
Multiple Choice (4 points each) – Choose the best answer for each of the following:

In capital budgeting analysis of projects, higher risk is most easily incorporated by
Adjustingtheinterestratehigher,
Adjustingtheinterestratelower,
Adjusting the cash flows higher,a
Adjusting the cash flows lower,
Noneoftheabove.
Sensitivityanalysis:
Provides profitability breakeven analysis,
Provides direction once a project has started,
Identifies input variables that are most critical,
Alloftheabove.
Which of the following is a Qualitative risk assessment?
Surveys,
Marketbeta,
Sensitivity analysis,
Standarddeviationofprofitability.
Thecertaintyequivalentmethod:
Adjusts cash flows for risk,
Usesarisk-freediscountrate,
Is more difficult to implement than a risk-adjusted discount rate,
Alloftheabove.
Which of the following is NOT true regarding capital rationing?
From a financial theory perspective, for for-profit firms there is no basis for it,
Safe projects are always chosen over risky projects,
It refers to having limited capital for projects,
The profitability index is a useful tool.
Which of the following is not a short-term asset?
Cash,
Inventory,
Accounts payable,
Accountsreceivable.
Which of the following is not a way Just-in-Time inventory systems can reduce total overall
costs to both the purchaser and supplier?

Reduced service levels (shorter hours, closed on weekends, etc.),
Shiftingwarehousecoststothesupplier,
Economies of scale,
Alloftheabovecanreducecosts.

8.When considering the Revenue cycle, which factors add to the Healthcare industry problems?

Uninsured Patients,
RegulatoryPressures
Limited Access to Capital
InefficientAdministrativeProcesses
All of the above

9.Extended collection periods are a problem because

thetimevalueofmoney,
third party payers will forget to pay,
the HCO will loss business when the bill is finally paid,
they aren’t really a problem.

10.Which is not part of the Revenue Cycle?

HADM 6305 – SP1
a. Advertising for new patients

b. Collecting data about the patient

c.Capturing charges

d. Submitting bills and claims

e. All of the above are parts of the Revenue Cycle.

11. On a per dollar bases, which current asset is likely to be most costly?

a. Cash,

b. Accounts receivable

c. Inventory

d. Prepaid Expenses

12.If an organization has a positive net float, which of the following is true?

The organization’s cash balance is less than the bank’s balance,
The organization’s cash balance is greater than the bank’s balance,
The organization’s cash balance is equal to the bank’s balance,
We cannot tell

13.Regarding current asset financing, which of the following is false?

It is necessary,
It should be limited to what is needed,
there is no cost involved,
it should involve analyzing each current asset account.

14.Which is not one of the three most popular ways to speed collections?

Negative float,
Lock box services,
Concentration banking,
Electronic claims processing.

15.What is the best way to control payables disbursements

a. lock box services,

b. departmentalization,
c. concentration banking.

d. payables centralization,

16.Using financial statements to assess the financial condition of the business is;

Financial statement analysis,
Operating indicator analysis,
Both of the above.

17.Using comparative analysis is best for determining;

How your firm performed compared to your competitors,
How your firm performed compared to last year,
How your competitors performed last year.

18.Using trend analysis is easiest with;

How your firm performed compared to your competitors,
How your firm performed compared to last year,
How your competitors performed last year.

19.Inflation can distort which analysis?

Comparative analysis,
Trendanalysis,
Both of the above.

20.An investor would be most concerned with which category of ratios?

Liquidity ratios,
Profitability ratios,
Debt management ratios,
Asset management ratios.

21.A short-term creditor would be most concerned with which category of ratios?

Liquidity ratios,
Profitability ratios,
Debt management ratios,
Assetmanagementratios,

22.A lease that provides for both the financing and maintenance of an asset

Is a Financial Lease,
Is an Operating Lease,
Is neither an Operating Lease or a Financial Lease
Can be both an Operating Lease and a Financial Lease.

23.A lease that is a contractual obligation for the lessee

Is a Financial Lease,
Is an Operating Lease,
Is neither an Operating Lease or a Financial Lease,
Can be both an Operating Lease or a Financial Lease.

24.Which risk is measured by the standard deviation of profitability?

Stand-alonerisk,
Marketrisk,
Total risk,
none of the above.

25.Which risk does not affect the managers of a business?

Stand-alonerisk,
Marketrisk,
Total risk,
none of the above.

26.Which risk can be mostly avoided through diversification?

Stand-alone risk,
Interest rate risk,
Market risk,
none of the above.

27.Which risk should wise investors be most concerned with?

Stand-alonerisk,
Marketrisk,
Total risk,
none of the above.

28. Which risk is measured by its beta?

Stand-alonerisk,
Marketrisk,
Total risk,
none of the above.

29. The cancelation of a lease would be done most likely by

The lessor in a Financial Lease,
The lessee in a Financial Lease,
The lessor in an Operating Lease,
The lessee in an OperatingLease.

30. A lease that is designed to cover the full cost of the leased asset

Is a Financial Lease,
Is an Operating Lease,
Is neither an Operating Lease or a Financial Lease,
Can be both an Operating Lease or a Financial Lease.