What is the difference between simple interest and compound interest? Write out the equation to find the future value of a single amount, and define each of the terms in it. Does the n in the formula (1 + i)n always mean compounding on an annual basis? How should the future value equation be modified when compounding occurs more frequently than annually? What is the future value of $10,000 with an interest rate of 16 percent and one annual period of compounding? With an annual interest rate of 16 percent and two semiannual periods of compounding? With an annual interest rate of 16 percent and four quarterly periods of compounding? Referring to the answer to the question previous, explain why the investment increases in value when the number of compounding periods increases. What is the relationship between the present value factor and the future value factor? What happens to the present value factor as the discount rate or the interest rate increases for a given time period? As the discount rate or the interest rate decreases? Comment on the following statement: When a notforprofit facility receives a contribution from a member of the community, the cost of capital is inconsequential when deciding how to use this contribution because it is, in effect, free money. From a capital investment point of view, what are the goals of a health care facility? What are the primary drawbacks of the payback method as a capital budgeting technique? When using the IRR approach, when can the internal rate of return be determined simply by dividing the initial outlay by the cash flows? Why do pro forma income statements adjust for depreciation expense when developing projected cash flows for a project? If a hospital were considering a new women's health initiative, what spillover cash flows might result? When performing a capital budgeting analysis, what costs should be included and what costs should be excluded as part of an initial investment?