HMGT 3311 FINAL EXAM
1. A nonprofit hospital has total assets of $900,000, liabilities of $600,000, and
net assets with donor restrictions of $100,000. Net assets without donor re-
strictions equal
Answer $200,000
2. Under accrual accounting, revenue is recorded when
Answer Services are earned
3. Operating income increased from $2,000,000 to $2,500,000. What is the
horizontal percentage change?
Answer 25%
4. Vertical analysis on the income statement expresses each line item as a
percentage of
Answer Total revenue
5. Working capital is defined as
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, Answer Current assets minus current liabilities
6. Terms are 2/10 net 30. What is the approximate annualized cost of NOT taking
the discount?
Answer 37%
7. An organization invests $10,000 today at an annual interest rate of 10 percent,
compounded annually, for five years. What will be the value of this investment
at the end of five years?
=FV(0.10,5,0,-10000)
Answer $16,105
8. A provider service has fixed costs of $300,000 per year. The service charges
$200 per visit and incurs variable costs of $50 per visit. How many patient visits
are required for the service to break even?
=300000/(200-50)
Answer 2,000 visits
9. Annuity payments occur at the beginning of each year. This is called
2/
18
, Answer
Excel tip
Type = 1
: Annuity due
10. A project has an initial investment of $1,000,000 and PV of cash inflows of
$1,200,000. The NPV is
Answer
1200000-1000000
: $200,000
11. If NPV is positive, the IRR must be
Answer Greater than the discount rate
12. Contribution margin equa
Answer Revenue minus variable costs
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18
1. A nonprofit hospital has total assets of $900,000, liabilities of $600,000, and
net assets with donor restrictions of $100,000. Net assets without donor re-
strictions equal
Answer $200,000
2. Under accrual accounting, revenue is recorded when
Answer Services are earned
3. Operating income increased from $2,000,000 to $2,500,000. What is the
horizontal percentage change?
Answer 25%
4. Vertical analysis on the income statement expresses each line item as a
percentage of
Answer Total revenue
5. Working capital is defined as
1/
18
, Answer Current assets minus current liabilities
6. Terms are 2/10 net 30. What is the approximate annualized cost of NOT taking
the discount?
Answer 37%
7. An organization invests $10,000 today at an annual interest rate of 10 percent,
compounded annually, for five years. What will be the value of this investment
at the end of five years?
=FV(0.10,5,0,-10000)
Answer $16,105
8. A provider service has fixed costs of $300,000 per year. The service charges
$200 per visit and incurs variable costs of $50 per visit. How many patient visits
are required for the service to break even?
=300000/(200-50)
Answer 2,000 visits
9. Annuity payments occur at the beginning of each year. This is called
2/
18
, Answer
Excel tip
Type = 1
: Annuity due
10. A project has an initial investment of $1,000,000 and PV of cash inflows of
$1,200,000. The NPV is
Answer
1200000-1000000
: $200,000
11. If NPV is positive, the IRR must be
Answer Greater than the discount rate
12. Contribution margin equa
Answer Revenue minus variable costs
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