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1. Why do health care organizations require to develop capital budgets? How many years require to be included and why?

2. What are the consequences to a health care organization that does not have the financial position to execute any capital spending?

3. If a hospital has an average patient census at approximately 50% of capacity, should they consider taking on an HMO population that will increase their census by about 15%, but will only reimburse an average of 2% above total cost (fixed and variable)? describe your answer.

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