HSA 400 Final Exam Study Guide
capital expenditure - ANSWER costs associated with the investment in equipment and
facilities; expected to provide benefit during a reasonably long period
capital assets - ANSWER tangible fixed assets that have a useful life greater than 1 year,
such as plant, property, and equipment
lease - ANSWER a contract in which the lesser agrees to pay the lessor a specific
amount over a period of time for the use of an asset
life cycle costing - ANSWER a method for estimating the cost of a capital project that
reflects the total costs, both operating and capital, over the project's estimated useful
life
what are the four interrelated activities or stages of the capital decision-making
process? - ANSWER 1. generation of project information 2. evaluation of projects 3.
decisions about which projects to fund 4. project implementation and reporting
consolidation - ANSWER two or more corporations combine into a brand new
corporation
merger - ANSWER the combination of two or more companies, with one continuing as a
legal entity while all others cease to exist; the former company's assets and liabilities
become part of the continuing company's
acquisition of stock - ANSWER target company remains in existence as a separate legal
entity while the acquiring company owns stock of target, but does not own target's
individual assets such as inventory, equipment, or land
acquisition of assets - ANSWER the acquiring company ends up directly owning the
target's assets
horizontal merger - ANSWER two firms operating in the same kind of business
conglomerate merger - ANSWER involve firms engaged in unrelated business activity
leveraged buyout - ANSWER involve purchase of the entire public stock interest of a
firm, or division of a firm, financed primarily with debt
management buyout - ANSWER involves the purchase of the entire public stock interest
of a firm, or division of a firm, financed primarily with debt; transaction is made my
management
going private - ANSWER shares are owned exclusively by the acquiring party rather
than by third-party investors, and there is no market for trading its shares
, joint ventures - ANSWER involve the joining together of two or more firms in a project or
even in a new company founded jointly by the two companies
sell-offs - ANSWER are considered the opposite of M&A's, two major sell types are
spin-offs and divestitures
spin-off - ANSWER a separate new legal entity is formed with its shares distributed to
existing shareholders of the parent company in the same proportions as in the parent
company
divestitures - ANSWER involve the sale of a portion of the firm to an outside party with
cash or equivalent consideration received by the divesting firm
subsidiary - ANSWER an organization owned and and/or managed by another
organization
cash budget - ANSWER the budget that projects the organization's cash inflows and
outflows; amount of cash available at the end of the period
working capital - ANSWER current assets: (net working capital = current assets -
current liabilities)
purchasing - ANSWER relates to the acquisition of supplies and labor
collection - ANSWER represents the interval between the generation of a bill and the
actual collection of the cash from the patient or the patient's third-party payer
short-term financing - ANSWER financing paid back in less than a year
short-term investment - ANSWER investments liquidated within 1 year, such as
certificates of deposit, commercial paper and treasury bills
capital structure - ANSWER
allowances for depreciation - ANSWER the accumulated depreciation taken on the asset
to the date of the financial statement
contingencies - ANSWER uncontrollable changes in the environment that may affect the
financial condition of the organization
operating endowments - ANSWER the purpose of these funds is to provide a dependable
flow of investment earnings that can be used to supplement expected weaknesses in
operating earnings
subject forecasts - ANSWER have a place in the estimation of product line volumes;
often referred to as "seat of the pants" methods and other less flattering names
statistical forecasts - ANSWER predicts future activity based on some mathematical
model extrapolated from historical data
capital expenditure - ANSWER costs associated with the investment in equipment and
facilities; expected to provide benefit during a reasonably long period
capital assets - ANSWER tangible fixed assets that have a useful life greater than 1 year,
such as plant, property, and equipment
lease - ANSWER a contract in which the lesser agrees to pay the lessor a specific
amount over a period of time for the use of an asset
life cycle costing - ANSWER a method for estimating the cost of a capital project that
reflects the total costs, both operating and capital, over the project's estimated useful
life
what are the four interrelated activities or stages of the capital decision-making
process? - ANSWER 1. generation of project information 2. evaluation of projects 3.
decisions about which projects to fund 4. project implementation and reporting
consolidation - ANSWER two or more corporations combine into a brand new
corporation
merger - ANSWER the combination of two or more companies, with one continuing as a
legal entity while all others cease to exist; the former company's assets and liabilities
become part of the continuing company's
acquisition of stock - ANSWER target company remains in existence as a separate legal
entity while the acquiring company owns stock of target, but does not own target's
individual assets such as inventory, equipment, or land
acquisition of assets - ANSWER the acquiring company ends up directly owning the
target's assets
horizontal merger - ANSWER two firms operating in the same kind of business
conglomerate merger - ANSWER involve firms engaged in unrelated business activity
leveraged buyout - ANSWER involve purchase of the entire public stock interest of a
firm, or division of a firm, financed primarily with debt
management buyout - ANSWER involves the purchase of the entire public stock interest
of a firm, or division of a firm, financed primarily with debt; transaction is made my
management
going private - ANSWER shares are owned exclusively by the acquiring party rather
than by third-party investors, and there is no market for trading its shares
, joint ventures - ANSWER involve the joining together of two or more firms in a project or
even in a new company founded jointly by the two companies
sell-offs - ANSWER are considered the opposite of M&A's, two major sell types are
spin-offs and divestitures
spin-off - ANSWER a separate new legal entity is formed with its shares distributed to
existing shareholders of the parent company in the same proportions as in the parent
company
divestitures - ANSWER involve the sale of a portion of the firm to an outside party with
cash or equivalent consideration received by the divesting firm
subsidiary - ANSWER an organization owned and and/or managed by another
organization
cash budget - ANSWER the budget that projects the organization's cash inflows and
outflows; amount of cash available at the end of the period
working capital - ANSWER current assets: (net working capital = current assets -
current liabilities)
purchasing - ANSWER relates to the acquisition of supplies and labor
collection - ANSWER represents the interval between the generation of a bill and the
actual collection of the cash from the patient or the patient's third-party payer
short-term financing - ANSWER financing paid back in less than a year
short-term investment - ANSWER investments liquidated within 1 year, such as
certificates of deposit, commercial paper and treasury bills
capital structure - ANSWER
allowances for depreciation - ANSWER the accumulated depreciation taken on the asset
to the date of the financial statement
contingencies - ANSWER uncontrollable changes in the environment that may affect the
financial condition of the organization
operating endowments - ANSWER the purpose of these funds is to provide a dependable
flow of investment earnings that can be used to supplement expected weaknesses in
operating earnings
subject forecasts - ANSWER have a place in the estimation of product line volumes;
often referred to as "seat of the pants" methods and other less flattering names
statistical forecasts - ANSWER predicts future activity based on some mathematical
model extrapolated from historical data
