FINANCE Final Exam -
Answer the following questions based on the course presentation, text, and any outside relevant sources. Use citations and show your work where applicable.
1. Strategic and Financial Planning
a. Define Strategic Planning
b. Define Financial Planning
c. What are the 4 steps involved in the development of an effective financial plan
2. Auditing Ch. 9
a. Why do we audit our financial statements?
b. What is included in an outside audit?
3. Depreciation Ch. 10
a. What is the difference between depreciation and amortization? What items would fall under each?
b. You purchase a new ultrasound for $100k. Its useful life is 8 years and the salvage value is $10k. (show your work for each)
i. Calculate the annual depreciation using straight line depreciation.
ii. Calculate the annual depreciation using the Double Declining Balance.
4. What is the basic equation for keeping track of inventory? Ch. 11
5. Present Value and Future value of money Ch. 15
a. Calculate the future value of the following
i. You invest $50k today in a LTC facility set to open in 3 years. Interest rates are expected to be 3% over the next 3 years. What is the Future value of the money you invested?
ii. You invest $20k in your friend's startup. They are designing a Healthcare App set to launch in 2 years. Interest rates are at 4%. What is the FV of the investment?
1. What happens to the FV if it takes 5 years to launch?
6. The clinic at Post Hospital is offering community members an annual health exam. The exam includes a checkup along with a flu shot, if needed. The exam costs the hospital $20 and the flu shot costs $5. The net revenue for each patient is $30. In 2017 there were 500 community members who came for an exam. Of the 500, 200 of these patients only had an exam and the other 300 had an exam and a flu shot.
a. Create the following for 2018 based off of 2017 stats:
i. Statistical Budget
ii. Revenue Budget
iii. Expense Budget
iv. Operating Budget
b. In 2018 the amount of patients remains consistent at 500 but the amount of patients needing an exam and flu shot increases to 400. Update your revenue and expense budgets to reflect this. (Actual, budgeted, variance)
c. What is the average cost per patient in 2017 vs. 2018? What caused the variance?
7. Calculate the reimbursement for a General Internal Medicine Practice.
a. In 2019 you anticipate patient volume to be 15,000. Your reimbursement rates on average are 35% of charges. Based on last year's volume projections, what is your expected revenue (reimbursement) for 2019?
b. What if the volume for general visits shifts to 30% and the volume of comprehensive increases to 20%?
8. Create the 2019 budget for LIU Cardiology Partners
a. Background: In 2018 there were 8 physicians and 10 support staff. Each physician generates on average the same NPSR. They also have the same malpractice rates. The actual amounts (as opposed to budgeted or variance) for 2018 are listed on the nest page.
i. Assume: Staff are all paid the same amount each year. Each physician is under contract and paid the same amount each year regardless of revenue. Malpractice rates have remained consistent per MD. All physicians are par with insurance companies at the time of hire.
b. Prepare the budget for 2019 and incorporate the following changes
i. 2 additional physicians will be added in January 2019. (assume they will be par with insurance companies at the start of the year)
ii. 1 additional support staff will be added on in January 2019
iii. Your contract with the consulting and mgt. company ends in June of 2019. The quarterly rate is $75,000.
iv. Increase in patient volume from your new physicians will increase expenses 20% across the board.
v. Laboratory services will be outsourced.
Textbook - Accounting Fundamentals for Health Care Management, Third Edition by Steven A. Finkler, Thad D. Calabrese and David M. Ward
Chapter 15 - Investment Analysis: What Should We Do Next?
Attachment:- Assignment Files.rar