LSUS MHA 706 MIDTERM COMPREHENSIVE
HEALTHCARE ADMINISTRATION EXAM
SCRIPT 2026 FULL QUESTIONS AND
CORRECT ANSWERS
◉ Which one of the following is a capital structure decision?
a.) Determining the optimal inventory level
b.) Establishing the preferred debt-equity level
c.) Selecting new equipment to purchase
d.) Setting the terms of sale for credit sales
e.) Determining when suppliers should be paid
Answer: Establishing the preferred debt-equity level
◉ Working capital management includes which one of the
following?
a.) Deciding which new projects to accept
b.) Deciding whether to purchase a new machine or fix a currently
owned machine
c.) Determining which customers will be granted credit
d.) Determining how many new shares of stock should be issued
,e.) Establishing the target debt-equity ratio
Answer: Determining which customers will be granted credit
◉ The daily financial operations of a firm are primarily controlled by
managing the:
a.) total debt level
b.) working capital
c.) capital structure
d.) capital budget
e.) long-term liabilities
Answer: working capital
◉ One advantage of the corporate form of organization is the:
a.) taxation of the corporate profits.
b.) unlimited liability for its shareholders.
c.) double taxation of profits.
d.) ability to raise larger sums of equity capital than other
organizational forms.
e.) ease of formation compared to other organizational forms.
Answer: ability to raise larger sums of equity capital than other
organizational forms.
,◉ The Sarbanes-Oxley Act of 2002 has:
a.) reduced the annual compliance costs of all publicly traded firms
in the U.S.
b.) decreased senior management's involvement in the corporate
annual report.
c.) greatly increased the number of U.S. firms that are going public
for the first time.
d.) decreased the number of U.S. firms going public on foreign
exchanges.
e.) essentially made officers of publicly traded firms personally
responsible for the firm's financial statements.
Answer: essentially made officers of publicly traded firms personally
responsible for the firm's financial statements.
◉ The primary goal of financial management is most associated with
increasing the:
a.) dollar amount of each sale
b.) traffic flow within the firm's stores
c.) fixed costs while lowering the variable costs
d.) firm's liquidity
e.) market value of the firm
Answer: market value of the firm
, ◉ Which one of the following best describes the primary intent of
the Sarbanes-Oxley Act of 2002?
a.) Decrease the number of corporations that can be publicly traded
b.) Increase the protections against corporate fraud
c.) Limit secondary issues of corporate securities
d.) Increase the dividends paid to shareholders
e.) Increase the number of firms that "go dark"
Answer: Increase the protections against corporate fraud
◉ Which one of the following situations is most apt to create an
agency conflict?
a.) Compensating a manager based on his or her division's net
income
b.) Giving all employees a bonus if a certain level of efficiency is
maintained
c.) Hiring an independent consultant to study the operating
efficiency of the firm
d.) Basing management bonuses on the length of employment
e.) Laying off employees during a slack period
Answer: Basing management bonuses on the length of employment
◉ One example of a primary market transaction would be the:
a.) sale of 100 shares of stock by Maria to her best friend.
HEALTHCARE ADMINISTRATION EXAM
SCRIPT 2026 FULL QUESTIONS AND
CORRECT ANSWERS
◉ Which one of the following is a capital structure decision?
a.) Determining the optimal inventory level
b.) Establishing the preferred debt-equity level
c.) Selecting new equipment to purchase
d.) Setting the terms of sale for credit sales
e.) Determining when suppliers should be paid
Answer: Establishing the preferred debt-equity level
◉ Working capital management includes which one of the
following?
a.) Deciding which new projects to accept
b.) Deciding whether to purchase a new machine or fix a currently
owned machine
c.) Determining which customers will be granted credit
d.) Determining how many new shares of stock should be issued
,e.) Establishing the target debt-equity ratio
Answer: Determining which customers will be granted credit
◉ The daily financial operations of a firm are primarily controlled by
managing the:
a.) total debt level
b.) working capital
c.) capital structure
d.) capital budget
e.) long-term liabilities
Answer: working capital
◉ One advantage of the corporate form of organization is the:
a.) taxation of the corporate profits.
b.) unlimited liability for its shareholders.
c.) double taxation of profits.
d.) ability to raise larger sums of equity capital than other
organizational forms.
e.) ease of formation compared to other organizational forms.
Answer: ability to raise larger sums of equity capital than other
organizational forms.
,◉ The Sarbanes-Oxley Act of 2002 has:
a.) reduced the annual compliance costs of all publicly traded firms
in the U.S.
b.) decreased senior management's involvement in the corporate
annual report.
c.) greatly increased the number of U.S. firms that are going public
for the first time.
d.) decreased the number of U.S. firms going public on foreign
exchanges.
e.) essentially made officers of publicly traded firms personally
responsible for the firm's financial statements.
Answer: essentially made officers of publicly traded firms personally
responsible for the firm's financial statements.
◉ The primary goal of financial management is most associated with
increasing the:
a.) dollar amount of each sale
b.) traffic flow within the firm's stores
c.) fixed costs while lowering the variable costs
d.) firm's liquidity
e.) market value of the firm
Answer: market value of the firm
, ◉ Which one of the following best describes the primary intent of
the Sarbanes-Oxley Act of 2002?
a.) Decrease the number of corporations that can be publicly traded
b.) Increase the protections against corporate fraud
c.) Limit secondary issues of corporate securities
d.) Increase the dividends paid to shareholders
e.) Increase the number of firms that "go dark"
Answer: Increase the protections against corporate fraud
◉ Which one of the following situations is most apt to create an
agency conflict?
a.) Compensating a manager based on his or her division's net
income
b.) Giving all employees a bonus if a certain level of efficiency is
maintained
c.) Hiring an independent consultant to study the operating
efficiency of the firm
d.) Basing management bonuses on the length of employment
e.) Laying off employees during a slack period
Answer: Basing management bonuses on the length of employment
◉ One example of a primary market transaction would be the:
a.) sale of 100 shares of stock by Maria to her best friend.
