WGU D513 – Healthcare Financial Management: Task 2
Comprehensive Practice Guide (Budget Development &
Variance Analysis, 2026 Edition)
1. A hospital is evaluating the financial viability of a new outpatient surgery center. The center
will have fixed costs of $2.5 million per year, variable costs of $800 per procedure, and
expected revenue of $1,500 per procedure. What is the break-even volume in procedures per
year?
A. 3,571 procedures per year
B. 3,125 procedures per year
C. 1,667 procedures per year
D. 2,500 procedures per year
Answer: A. 3,571 procedures per year
2. A clinic has an average collection period of 45 days and annual net patient revenue of
$3,650,000. What is the average accounts receivable balance?
A. $450,000
B. $500,000
C. $300,000
D. $350,000
Answer: A. $450,000
3. A physician practice is considering adding a new service line. The initial investment is $1.2
million, expected annual net cash inflows are $400,000 for 4 years, and the discount rate is
10%. What is the net present value (NPV)? (PV factors for 10%: Year 1: 0.909, Year 2: 0.826, Year
3: 0.751, Year 4: 0.683)
A. $67,600
B. $400,000
C. $67,600
D. $67,600
Answer: A. $67,600
4. A hospital is considering two mutually exclusive projects: Project A has a 5-year life and an
NPV of $2 million, Project B has a 3-year life and an NPV of $1.5 million. The discount rate is
8%. Which project should be chosen, and why?
A. Project B, because it has a higher equivalent annual annuity.
B. Project A, because it has a higher NPV.
C. Project A, because it has a lower payback period.
D. Project B, because it has a shorter payback period.
Answer: A. Project B, because it has a higher equivalent annual annuity.
5. A health plan uses a capitation payment model for primary care. The capitation rate is $120
per member per month (PMPM). If the plan has 5,000 members, what is the total monthly
capitation payment?
A. $600,000
Comprehensive Practice Guide (Budget Development &
Variance Analysis, 2026 Edition)
1. A hospital is evaluating the financial viability of a new outpatient surgery center. The center
will have fixed costs of $2.5 million per year, variable costs of $800 per procedure, and
expected revenue of $1,500 per procedure. What is the break-even volume in procedures per
year?
A. 3,571 procedures per year
B. 3,125 procedures per year
C. 1,667 procedures per year
D. 2,500 procedures per year
Answer: A. 3,571 procedures per year
2. A clinic has an average collection period of 45 days and annual net patient revenue of
$3,650,000. What is the average accounts receivable balance?
A. $450,000
B. $500,000
C. $300,000
D. $350,000
Answer: A. $450,000
3. A physician practice is considering adding a new service line. The initial investment is $1.2
million, expected annual net cash inflows are $400,000 for 4 years, and the discount rate is
10%. What is the net present value (NPV)? (PV factors for 10%: Year 1: 0.909, Year 2: 0.826, Year
3: 0.751, Year 4: 0.683)
A. $67,600
B. $400,000
C. $67,600
D. $67,600
Answer: A. $67,600
4. A hospital is considering two mutually exclusive projects: Project A has a 5-year life and an
NPV of $2 million, Project B has a 3-year life and an NPV of $1.5 million. The discount rate is
8%. Which project should be chosen, and why?
A. Project B, because it has a higher equivalent annual annuity.
B. Project A, because it has a higher NPV.
C. Project A, because it has a lower payback period.
D. Project B, because it has a shorter payback period.
Answer: A. Project B, because it has a higher equivalent annual annuity.
5. A health plan uses a capitation payment model for primary care. The capitation rate is $120
per member per month (PMPM). If the plan has 5,000 members, what is the total monthly
capitation payment?
A. $600,000
