,1. Which of the following best describes the concept of Weighted
Average Cost of Capital (WACC)?
a) The average interest rate a company pays on its debt
b) The average return required by all of a company’s investors
c) The cost of equity financing only
d) The company's total liabilities divided by its total assets
Answer: b) The average return required by all of a
company’s investors
Rationale: WACC is a calculation of a firm's cost of capital
wherein each category of capital is proportionately weighted.
2. In healthcare finance, a major benefit of capitation payment
models is:
a) It encourages overutilization of services
b) It provides predictable revenue tracking
c) It ensures unlimited access to healthcare services
d) It removes the focus on preventive care
Answer: b) It provides predictable revenue tracking
Rationale: Capitation models enable healthcare providers to
predict their revenue more accurately as payments are based on a
per-member-per-month basis.
, 3. What is the primary objective of financial forecasting for
healthcare organizations?
a) To assess employee performance
b) To evaluate competitor strategies
c) To predict future revenue and expenses
d) To determine marketing strategies
Answer: c) To predict future revenue and expenses
Rationale: Financial forecasting assists organizations in
understanding future financial conditions, helping them in planning
and decision-making.
Fill-in-the-Blank Questions
4. The ________ approach to capital budgeting includes using
risk-adjusted discount rates for different types of projects.
Answer: incremental
Rationale: Incremental approaches adjust discount rates based
on the risk associated with specific projects.
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