FACHE BOG Exam Q&As 2024
Weighted average cost of capital model (WACC) - ANS-Method to measure the costs of
various service of capital and the impact of the capital structure
Weighted average cost of capital model (WACC) - ANS-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
Net present value & internal rate of return - ANS-Economic evaluation techniques
(adjusted for he time value of money)
Accounting rate of return & pay back - ANS-Accounting evaluation techniques (not
adjusted for the time value of money)
Net working capital - ANS-On the balance sheet, what does the difference between total
current assets and total current liabilities indicate?
Infrastructure - ANS-Budgets for new capital expenditures include requests for...
Capital asset pricing model (CAPM) - ANS-An equilibrium model that describes the
relationship between market risk and required rate of return
Full-time equivalents per adjusted averaged daily census - ANS-The most common
operating indicator used to measure overall staff productivity
The following are considered part of the labor budget - ANS-Staff salaries, hourly
wages, employee benefits
Contract staff expenses - ANS-Are NOT considered part of the labor budget
claim denial - ANS-Claim denial is a major impediment to prompt payment in the
revenue cycle process
FTE - ANS-20.8
, Expense ratio - ANS-Best indicator of operating leverage when evaluating
capital budgeting performance
Analysis of proposed capital investment includes - ANS-Cost of capital, cash flow
projections, rush assessment
Revenue cycle billing management typically includes - ANS-Activities before services
are rendered, activities that occur simultaneously with the services and activities after
services are rendered.
Drug prescriptions - ANS-An example of direct costs
Demand, cost, and output/productivity - ANS-3 basic categories of quantitative
performance measures used in conventional accounting systems
Under a capitated payment system... - ANS-The risk sharing arrangements involve
hospitals and insurers
Net Present Value (NPV) - ANS-A profitability measure that uses discounted cash flow
Opportunity costs - ANS-Must be included when determining a capital project's
incremental cash flow
Generally Accepted Accounting Principles (GAAP) - ANS-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 - ANS-Discount rate at which net present value is zero
Statement of cash flows is organized in 3 sections: - ANS-Cash from operations, cash
from investing activities and cash flow from financing activities
Financial ratio analysis - ANS-Combines data from a balance sheet and an income
statement to create a single number that facilitates easy interpretation
Balance sheet - ANS-Reviewed by CEO when s/he wants a snapshot of the
financial conditions of the organization
Where should charity care be shown in a financial statement? - ANS-In the notes to the
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