HEA 478 - Strategic Management in Healthcare » Fall 2021 » Chapter 9 Quiz

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Question #1
Break-even analysis includes
A.   fixed and variable costs
B.   an appropriately determined discount rate
C.   liquid and non-liquid assets
D.   payback analysis
Question #2
An organization that is highly financially leveraged has
A.   a high current ratio
B.   a low operating margin
C.   a high debt-to-assets ratio
D.   a positive net margin
Question #3
All of the following are major problems with net present value except
A.   accurately determining future cash flows
B.   determining an accurate discount rate
C.   the finite amount of available capital
D.   accounting for nonfinancial, mission-based reasons
Question #4
Operating statements include all of the following except
A.   revenues
B.   personnel expenses
C.   depreciation
D.   asset values
Question #5
Return on assets is a
A.   debt ratio
B.   liquidity ratio
C.   activity ratio
D.   profitability ratio
Question #6
Why would an organization want to have a short average payment period?
A.   It indicates positive cash flow.
B.   It lowers discount rates.
C.   It encourages vendors to provide higher discounts.
D.   It frees up cash for other purposes.
Question #7
Appropriate liquidity enables an organization to
A.   understand the amount of debt needed to fund long-term projects
B.   minimize the amount of interest it can earn on its invested monies
C.   quickly sell almost all of its assets if threatened with bankruptcy
D.   meet its short-term financial obligations and carry out planned financial transactions
Question #8
Variable costs
A.   always decrease with volume decreases
B.   change in correlation with fixed costs.
C.   change only within a range of volume.
D.   always increase with volume increases
Question #9
A major difference between operating margin and net margin is that net margin accounts for
A.   depreciation
B.   cash flows
C.   arbitrage
D.   all revenue sources
Question #10
A key aspect of net present value is
A.   accounting for depreciation
B.   unequal cash flows
C.   salvage values
D.   time value of money
Question #11
Which of the following is a measure of liquidity?
A.   Asset turnover
B.   Debt-to-asset ratio
C.   Acid or quick ratio
D.   Operating margin

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