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Fellow of the American College of Healthcare
Executives (FACHE) Board of Governors (BOG)
Exam Questions and Answers with Complete
Solutions
Weighted average cost of capital model (WACC) - ANSWER>>Method to
measure the costs of various service of capital and the impact of the capital
structure
Weighted average cost of capital model (WACC) - ANSWER>>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 - ANSWER>>Economic evaluation techniques &
accounting evaluation tecchniques
Net present value & internal rate of return - ANSWER>>Economic evaluation
techniques (adjusted for he time value of money)
Accounting rate of return & pay back - ANSWER>>Accounting evaluation
techniques (not adjusted for the time value of money)
Net working capital - ANSWER>>On the balance sheet, what does the
difference between total current assets and total current liabilities indicate?
Infrastructure - ANSWER>>Budgets for new capital expenditures include
requests for...
Capital asset pricing model (CAPM) - ANSWER>>An equilibrium model that
describes the relationship between market risk and required rate of return
Full-time equivalents per adjusted averaged daily census - ANSWER>>The
most common operating indicator used to measure overall staff productivity
The following are considered part of the labor budget - ANSWER>>Staff
salaries, hourly wages, employee benefits
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Contract staff expenses - ANSWER>>Are NOT considered part of the labor
budget
claim denial - ANSWER>>Claim denial is a major impediment to prompt
payment in the revenue cycle process
FTE - ANSWER>>20.8
Expense ratio - ANSWER>>Best indicator of operating leverage when
evaluating capital budgeting performance
Analysis of proposed capital investment includes - ANSWER>>Cost of capital,
cash flow projections, rush assessment
Revenue cycle billing management typically includes - ANSWER>>Activities
before services are rendered, activities that occur simultaneously with the
services and activities after services are rendered.
Drug prescriptions - ANSWER>>An example of direct costs
Demand, cost, and output/productivity - ANSWER>>3 basic categories of
quantitative performance measures used in conventional accounting systems
Under a capitated payment system... - ANSWER>>The risk sharing
arrangements involve hospitals and insurers
Net Present Value (NPV) - ANSWER>>A profitability measure that uses
discounted cash flow
Opportunity costs - ANSWER>>Must be included when determining a capital
project's incremental cash flow
Generally Accepted Accounting Principles (GAAP) - ANSWER>>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 - ANSWER>>Discount rate at which net
present value is zero
Fellow of the American College of Healthcare
Executives (FACHE) Board of Governors (BOG)
Exam Questions and Answers with Complete
Solutions
Weighted average cost of capital model (WACC) - ANSWER>>Method to
measure the costs of various service of capital and the impact of the capital
structure
Weighted average cost of capital model (WACC) - ANSWER>>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 - ANSWER>>Economic evaluation techniques &
accounting evaluation tecchniques
Net present value & internal rate of return - ANSWER>>Economic evaluation
techniques (adjusted for he time value of money)
Accounting rate of return & pay back - ANSWER>>Accounting evaluation
techniques (not adjusted for the time value of money)
Net working capital - ANSWER>>On the balance sheet, what does the
difference between total current assets and total current liabilities indicate?
Infrastructure - ANSWER>>Budgets for new capital expenditures include
requests for...
Capital asset pricing model (CAPM) - ANSWER>>An equilibrium model that
describes the relationship between market risk and required rate of return
Full-time equivalents per adjusted averaged daily census - ANSWER>>The
most common operating indicator used to measure overall staff productivity
The following are considered part of the labor budget - ANSWER>>Staff
salaries, hourly wages, employee benefits
, Page 2 of 6
Contract staff expenses - ANSWER>>Are NOT considered part of the labor
budget
claim denial - ANSWER>>Claim denial is a major impediment to prompt
payment in the revenue cycle process
FTE - ANSWER>>20.8
Expense ratio - ANSWER>>Best indicator of operating leverage when
evaluating capital budgeting performance
Analysis of proposed capital investment includes - ANSWER>>Cost of capital,
cash flow projections, rush assessment
Revenue cycle billing management typically includes - ANSWER>>Activities
before services are rendered, activities that occur simultaneously with the
services and activities after services are rendered.
Drug prescriptions - ANSWER>>An example of direct costs
Demand, cost, and output/productivity - ANSWER>>3 basic categories of
quantitative performance measures used in conventional accounting systems
Under a capitated payment system... - ANSWER>>The risk sharing
arrangements involve hospitals and insurers
Net Present Value (NPV) - ANSWER>>A profitability measure that uses
discounted cash flow
Opportunity costs - ANSWER>>Must be included when determining a capital
project's incremental cash flow
Generally Accepted Accounting Principles (GAAP) - ANSWER>>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 - ANSWER>>Discount rate at which net
present value is zero
