HSMA 4055 Quiz 6 With Complete Questions And
Answers 100% Pass
Which of the following statements about project cash flow estimation is incorrect? -
ANSWER sunk costs should be included
Which of the following statements about financial risk incorrect? - ANSWER The higher
the risk, the lower the project cost of capital (discount rate)
Which of the following is not a relevant cash flow when estimating the incremental cash
flows for a new hospital service? - ANSWER the cost of consultant's report concerning
the feasibility of the service that was completed (and paid for) in the previous year
A medical group practice is considering offering a new service with risk that is greater
than the current risk of the business. In evaluating this investment, the decision maker
should - ANSWER increase the cost of capital applied to the project to make it higher
than the business's corporate cost of capital
Which of the following statements about project cash flow estimation is most correct? -
ANSWER depreciation expense can be ignored when estimating project cash flows
within not-for-profit organizations
Which of the following statements about project risk analysis techniques is most
correct? - ANSWER scenario analysis considers the joint (combined) impact of changes
in uncertain input variables on profitability
Which of the following statements about the qualitative approach to project risk
assessment is most correct? - ANSWER qualitative risk assessment involves the
answers to a number of yes/no questions
typically, yes answers are assigned one point and no answers zero points
the higher score, the greater risk
typically, qualitative risk assessment is used in conjunction with a quantitative risk
assessment (as opposed to in place of a quantitative risk assessment)
(all of the above statements are correct)
Which of the following statements about capital rationing is most correct? - ANSWER
capital rationing occurs when a business does not have the capital necessary to fund all
acceptable projects
Which of the following statements about project life in capital budgeting analysis most
correct? - ANSWER if the analysis extends over the project's expected life, a salvage
value cash flow is added to the timeline
Answers 100% Pass
Which of the following statements about project cash flow estimation is incorrect? -
ANSWER sunk costs should be included
Which of the following statements about financial risk incorrect? - ANSWER The higher
the risk, the lower the project cost of capital (discount rate)
Which of the following is not a relevant cash flow when estimating the incremental cash
flows for a new hospital service? - ANSWER the cost of consultant's report concerning
the feasibility of the service that was completed (and paid for) in the previous year
A medical group practice is considering offering a new service with risk that is greater
than the current risk of the business. In evaluating this investment, the decision maker
should - ANSWER increase the cost of capital applied to the project to make it higher
than the business's corporate cost of capital
Which of the following statements about project cash flow estimation is most correct? -
ANSWER depreciation expense can be ignored when estimating project cash flows
within not-for-profit organizations
Which of the following statements about project risk analysis techniques is most
correct? - ANSWER scenario analysis considers the joint (combined) impact of changes
in uncertain input variables on profitability
Which of the following statements about the qualitative approach to project risk
assessment is most correct? - ANSWER qualitative risk assessment involves the
answers to a number of yes/no questions
typically, yes answers are assigned one point and no answers zero points
the higher score, the greater risk
typically, qualitative risk assessment is used in conjunction with a quantitative risk
assessment (as opposed to in place of a quantitative risk assessment)
(all of the above statements are correct)
Which of the following statements about capital rationing is most correct? - ANSWER
capital rationing occurs when a business does not have the capital necessary to fund all
acceptable projects
Which of the following statements about project life in capital budgeting analysis most
correct? - ANSWER if the analysis extends over the project's expected life, a salvage
value cash flow is added to the timeline
