1. Your hospital has billed charges of $4,000,000 in February. Contractual adjustments are expected to be 20% of billed charges.

If your collection experience indicates that 20 percent is paid in the month billed, 40 percent in the second month, 20 percent in the third month, and 5 percent in the fourth month, determine the following values:

a) Net patient revenue for February

b) Prepare a "decay chart" for these billings

c) Net accounts receivable at the end of March for February billings

2. You are reviewing your targets for short-term cash reserves next year. You wish to carry at least twenty days cash on hand. If annual budgeted cash expenses are $48,000,000, what amount of short-term cash reserves should be targeted? Show calculations.

3. You have projected depreciation expense to be $1,000,000 in the next fiscal year with year-end accumulated depreciation balances being $5,000,000.

If inflation in medical equipment is averaging 10 percent per year and you wish to finance only 20 percent of your replacement needs with debt, what amount of replacement reserves should you target for year end? Show calculations.