1. True or False: In ratio analysis, a single value has little meaning. Therefore analysts use trend and comparative analyses to help interpret the numbers. a. True b. False 2.

True or False: The primary difference between financial statement analysis and operating indicator analysis is that operating indicator analysis does not use benchmarking while financial statement analysis does. a. True b. False

3. True or False: It is always quite easy to determine whether a given financial or operating ratio value is good or bad. a. True b. False

4. True or False: Because not-for-profits are not owned by shareholders, the return on equity (ROE) ratio is irrelevant when conducting a financial statement analysis. a. True b. False

5. Budgets are used for: a. Planning b. Communication c. Control d. Both a. and b. above e. a., b., and c. above

6. In budgeting, variance is: a. A measure of the degree of dispersion of a distribution about its mean value. b. The difference between a realized value and a budgeted, or standard, value. c. The percentage decrease in volume that can occur without causing the organization to lose money. d. The difference between operating profit and total profit. e. The difference between total revenues and total costs.

7. Which of the following statements about a flexible budget is most correct? a. A flexible budget uses realized (actual) prices along with all other original (static) budget assumptions. b. A flexible budget uses realized (actual) labor costs along with all other original (static) budget assumptions. c. A flexible budget uses realized (actual) supplies costs along with all other original (static) budget assumptions. d. A flexible budget uses realized (actual) facilities costs along with all other original (static) budget assumptions. e. A flexible budget uses realized (actual) volume along with all other original (static) budget assumptions.

8. True of False. The primary goal of variance analysis is to hold managers accountable for failure to adequately control operations. a. True b. False

9. Which of the following statements best describes the revenue cycle? a. It focuses on cash management. b. It focuses on inventory management. c. It focuses on receivables management. d. It focuses on cash, inventory, and receivables management. e. It focuses on all activities associated with billing and collecting for services.

10. The revenue cycle is composed of: a. Before-service activities b. At-service activities c. After-service activities d. Continuous activities e. The revenue cycle involves all of these activities

11. True or False: Two important keys to successful revenue cycle management are information technology and electronic claims processing. a. True b. False

12. Suppose a hospital writes checks of $100,000 per day and it takes, on average, seven days for those to be received and clear the banking system. Furthermore, the hospital receives $120,000 in checks daily that take four days to be deposited and credited. What is the hospitals float? a. $100,000 b. $120,000 c. $220,000 d. $240,000 e. $440,000

13. Which of the following are advantages of short-term financing (as compared to long-term financing)? a. Loans can be obtained faster. b. The interest rate on borrowed funds is generally lower. c. Interest costs are relatively stable over time. d. Answers a. and b. are both correct. e. Answers a., b., and c. are all correct.

14. Which of the following statements about project classifications is most correct? a. Projects are classified by purpose, such as replacement projects. b. Projects are classified by size, such as less than $1 million. c. Projects are classified by life, such as less than five years. d. Statements a. and b. are both correct. e. Statements a., b., and c. are all correct.

15. You have estimated the value of a planned project by finding the present value (PV) of all the cash inflows from that project. Which of the following would cause the project to look more appealing (have a greater NPV)? a. The discount rate decreases. b. The cash flows are extended over a longer period of time, but the total dollar amount of the cash flows remains the same. c. The discount rate increases. d. Answers a. and b. are both correct. e. Answers b. and c. are both correct.

16. The internal rate of return (IRR) of a capital investment: a. Changes when the cost of capital changes. b. Must exceed the project cost of capital to make the investment financially acceptable. c. Measures the dollar profitability of a project. d. Must be less than the project cost of capital to make the investment financially acceptable. e. Measures the length of time that it takes a business to recover its initial investment in the project.

17. The price of an outstanding bond is determined by which of the following? a. The bonds par value b. The bonds coupon rate c. The required rate of return on similar bonds d. The time to maturity e. All of these answers are correct

18. Which of the following basic characteristics are required to make health insurance work? a. Pooling of losses b. Payment only for random losses c. Risk transfer d. Indemnification e. All of the above characteristics are required

19. Which of the following statements about moral hazard is most correct? a. Moral hazard means those individuals with greater health risk are more likely to purchase health insurance. b. Unfortunately, there is nothing that insurers can do to combat the moral hazard problem other than increase premium rates. c. Moral hazard is the overuse of healthcare services or forgoing of prevention because the insured individual does not bear the full costs of the consequences. d. Under the ACA, health insurers can reduce the moral hazard problem by including preexisting condition clauses in insurance contracts. e. Businesses that provide health insurance reduce the moral hazard problem by limiting the program to those employees under age 50.

20. True or False: The typical health providers revenues are roughly evenly split between payments by patients and payments by third-party payers (insurers). a. True b. False