# BUS 694

1 A firm has the following accounts:

Net patient revenue = \$1,500,000

Supply expense = \$200,000

Depreciation expense = \$100,000

Salaries and benefits = \$700,000

Other expenses = \$200,000

Net accounts receivable = \$150,000

What is the net income for the period? (Points : 5)

\$150,000

\$50,000

\$500,000

\$850,000

1. A hospital issues \$20 million in bonds and \$60 million in equity to finance a new project. Its targeted debt to equity ratio is: (Points : 5)

50%

33%

200%

300%

2. Which of the following statements about accounts receivable and inventory is true? (Points : 5)

They are both considered current assets

They are both considered expenses

They are both excluded from current assets

They are both considered current liabilities

Total revenue outpaces total avoidable fixed costs

3. The breakeven point occurs where: (Points : 5)

Total fixed costs and total revenue intersect

Revenue minus variable cost minus fixed cost = 0

Total profit margin and total costs intersect

Total variable costs and total revenue intersect

Total revenue outpaces total avoidable fixed costs

4. A statement that reports the revenues minus expenses of an entity is called: (Points : 5)

Income statement

Statement of retained earnings

Balance sheet

Report of management

Statement of cash flows

5. An imaging center has the following information:

Revenue per test: \$225

Variable cost per test: \$150

Total fixed costs: \$225,000

Estimated number of tests = 3,500

Calculate the total dollar contribution margin dollars and percentage

6. Your hospital has the following revenue for the months of July-September: July \$3,000,000 August \$2,500,000 September \$4,000,000. If 30% of the month’s revenue is collected in the same month, 40% is collected in the second month and 30% is collected in the third month, how much of July’s revenue is collected in August? (Points : 15)
7. Accounts receivables can constitute more than 50% of a healthcare organization’s current assets. Managing accounts receivables is critical to the cash flow of the organization. If you were a billing manager what should you consider when implementing credit and collection policies? (Points : 20)