FACHE BOG EXAM - ALL TOPICS QUESTIONS WITH CORRECT ANSWERS GRADED TO PASS

Weighted average cost of capital model (WACC) - Method to measure the costs of various service of capital and the impact of the capital structure Weighted average cost of capital model (WACC) - The relative amount of debt and equity in the capital structure and the cost of WACC source in the marketplace are used to determine weighted costs Evaluation techniques - Economic evaluation techniques & accounting evaluation tecchniques Net present value & internal rate of return - Economic evaluation techniques (adjusted for he time value of money) Accounting rate of return & pay back - Accounting evaluation techniques (not adjusted for the time value of money) Net working capital - On the balance sheet, what does the difference between total current assets and total current liabilities indicate? Infrastructure - Budgets for new capital expenditures include requests for... Capital asset pricing model (CAPM) - An equilibrium model that describes the relationship between market risk and required rate of return Full-time equivalents per adjusted averaged daily census - The most common operating indicator used to measure overall staff productivity The following are considered part of the labor budget - Staff salaries, hourly wages, employee benefits Contract staff expenses - Are NOT considered part of the labor budget claim denial - Claim denial is a major impediment to prompt payment in the revenue cycle process FTE - 20.8 Expense ratio - Best indicator of operating leverage when evaluating capital budgeting performance Analysis of proposed capital investment includes - Cost of capital, cash flow projections, rush assessment Revenue cycle billing management typically includes - Activities before services are rendered, activities that occur simultaneously with the services and activities after services are rendered. Drug prescriptions - An example of direct costs Demand, cost, and output/productivity - 3 basic categories of quantitative performance measures used in conventional accounting systems Under a capitated payment system... - The risk sharing arrangements involve hospitals and insurers Net Present Value (NPV) - A profitability measure that uses discounted cash flow Opportunity costs - Must be included when determining a capital project's incremental cash flow Generally Accepted Accounting Principles (GAAP) - Ensures that financial information that is reported to outsiders is consistent across businesses and presented in a manner that facilitated interpretation and judgements Internal rate of return measures - Discount rate at which net present value is zero Statement of cash flows is organized in 3 sections: - Cash from operations, cash from investing activities and cash flow from financing activities Financial ratio analysis - Combines data from a balance sheet and an income statement to create a single number that facilitates easy interpretation Balance sheet - Reviewed by CEO when s/he wants a snapshot of the financial conditions of the organization