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Questions and Answers of
Health Care Finance
Do you recall whether any of the four cash flow reporting methods were used? If so, which one? Do you now think that was the best choice for the particular proposal?LO,1
If so, which type of proposal was it? Was the proposal successful?LO,1
Have you ever been involved in helping to create any part of a capital expenditure budget?LO,1
Understand about evaluating capital expenditure proposals.LO,1
Recognize types of capital expenditure budget proposals.LO,1
Understand differences between cash flow reporting methods.LO,1
Review the cash flow and the startup cost concept.LO,1
Recognize the reason that a capital expenditure budget is necessary.LO,1
If you reviewed a budget at your workplace, do you think the major increases and decreases could be explained?LO,1
Do you believe your organization uses a flexible or a static budget? Why do you think so?LO,1
Do you believe your organization uses one or more operating budgets? Why do you think so?LO,1
Test one line-item calculation. Is the math for the dollar difference computed correctly? Is the percentage properly computed based on a percentage of the budget figure?LO,1
Are the figures annualized?LO,1
Are actual and budget for the same period?LO,1
Is the format of the budget comparable with that of previous periods so that several reports over time can be compared if so desired?LO,1
Are the line items within the budget all expenses (and revenues, if applicable) that are controllable by the manager?LO,1
Is the budget for a defined unit of authority?LO,1
Are the figures designated as fixed or variable?LO,1
Is this budget static (not adjusted for volume) or flexible (adjusted for volume during the year)?LO,1
Will this budget accomplish the appropriate managerial objectives for the organization?LO,1
Will additional resources be available?LO,1
What will the appropriate dollar cost be?(Note: this question requires a series of assumptions about the nature of the operation for the new budget period.)LO,1
What is the appropriate inflow (revenues) and outflow (cost of services delivered)relationship?LO,1
What is the proposed volume for the new budget period?LO,1
To create cost awareness throughout the organization.1 LO,1
To provide a useful tool for the control of costs.LO,1
To provide a basis for the evaluation of financial performance in accordance with a hospital’s policies and plans.LO,1
To provide a written expression, in quantitative terms, of a hospital’s policies and plans.LO,1
Understand the difference between static and flexible budgets.LO,1
Understand how to build an operating budget.LO,1
Understand what budget expenses will most likely be identifiable versus allocated expenses.LO,1
Understand the difference between operating budgets and capital expenditure budgets.LO,1
Have you ever in the course of your work reviewed a financial report that applied inflation factors? If so, were you able to see the assumptions used to apply the factors? If not, why not? Please
Were you also able to see the assumptions used to annualize? If so, were you able to recalculate the results using the same assumptions?LO,1
Have you ever in the course of your work reviewed a report that had been annualized?If so, did you agree with how it appeared to be annualized?LO,1
If you reviewed a budget at your workplace, do you think the major increases and decreases could be explained? If so, why? If not, why not?LO,1
Do you believe your organization uses a flexible or static budget? Why do you think so?LO,1
Understand basic currency measures.LO,1
Apply inflation factors.LO,1
Annualize partial-year expenses.LO,1
Understand the four uses of comparative data.LO,1
Understand the three criteria for true comparability.LO,1
Have you, in the course of your work, become involved in problems with capacity level issues such as space and equipment availability? If so, would forecasting have assisted in solving such problems?
Are you or your immediate supervisor involved with staffing decisions? If so, are you aware of how staffing forecasts are prepared in your organization? Describe an example.LO,1
Do any of the reports you receive in the course of your work use common sizing? Why do you think so?LO,1
Do any of the reports you receive in the course of your work use trend analysis? Why do you think so?LO,1
Understand capacity level issues in forecasts.LO,1
Understand five types of forecast assumptions.LO,1
Understand and use trend analysis.LO,1
Understand and use common sizing.LO,1
Have you had a chance to participate in an evaluation of an equipment purchase at your workplace? If so, would you have done it differently if you had supervised the evaluation? Why?LO,1
Have you seen the payback period concept used in your workplace? If not, do you think it ought to be used? What are your reasons?LO,1
Are you able to use the present-value look-up table now? Would you prefer a computer to compute it?LO,1
Can you compute an unadjusted rate of return now? Would you use it? Why?LO,1
Understand the payback period theory.LO,1
Compute an internal rate of return.LO,1
Understand how to use a present-value table.LO,1
Compute an unadjusted rate of return.LO,1
Can you think of good outside sources that could be used to obtain ratios for comparative purposes? If the outside information was available, what ratios would you choose to use? Why?LO,1
If not, do you believe ratios should be on the reports? Which reports?LO,1
If so, do you use them? How?LO,1
Are there ratios in the reports you receive at your workplace?LO,1
Successfully compute ratios.LO,1
Understand two types of profitability ratios.LO,1
Understand two types of solvency ratios.LO,1
Understand four types of liquidity ratios.LO,1
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