DQ

Pleas respond to each question in at least 100 words.

Reference

Cleverley, W. O., Cleverley, J. O., & Parks, A.P. (2024). Essentials of health care finance (9th ed.). Jones & Bartlett Learning

Chapters 19-22

1. Few firms ever track the actual results achieved from a specific capital investment against projected results. What are the likely effects of such a management policy?
2. A hospital’s investment of $100,000 in a piece of equipment will reduce labor costs by $40,000 per year for the next 5 years. In addition to the reduction in labor costs, 30% of all patients seen by the firm have a third-party payer arrangement that pays for capital costs on a retrospective basis. Thirty percent of all patients are also reimbursed for actual operating costs. What is the annual cash flow of the investment? Assume a 5-year life and straight-line depreciation