Questions 81-120

Question 1

A key reason for choosing board members is because:
1.
other board members want to listen to their opinions.
2.
of what they can do for the organization.
3.
they have high status in the community.
4.
physicians will listen to them.

Answer 1

2.

of what they can do for the organization.

Question 2

The bylaws of healthcare organizations should include which of the following?
1.
Committee scope and function
2.
The privileges of the medical staff
3.
The names of the stockholders in the organization
4.
Composition of the governing board, committees and officers

Answer 2

Composition of the governing board, committees and officers

Question 3

Successful approaches to strategic planning include:

1. a well-written mission statement, long-range plan and fiscal plan plus the history and discussion surrounding them.
2. avoidance of high-risk decisions.
3. not paying attention to the competitor’s activity.
4. using rules and past experience as a guide to future action.

Answer 3

a well-written mission statement, long-range plan and fiscal plan plus the history and discussion surrounding them

Question 4

The primary challenge facing a prospector is:

1. protecting and increasing current service (product) or market share through technical efficiency, cost improvements or differentiation strategies.
2. managing diversification successfully, to guard against expanding too rapidly or into areas where they have little knowledge.
3. managing simultaneously the difficult task of pursuing new markets and services while avoiding erosion of current services in existing markets.
4. creating stability by sticking with a strategic plan long enough to accumulate experience and to develop consistent leadership, avoiding random diversification efforts.

Answer 4

managing diversification successfully, to guard against expanding too rapidly or into areas where they have little knowledge.

Question 5

In the introductory stage of the product life cycle:

1. The introductory stage can be very short.
2. The introductory stage can be very long.
3. sales or revenue growth is slow.
4. all of the above.

Answer 5

4. all of the above.

Question 6

The primary task of marketing is to:

1. bring about voluntary and involuntary exchanges of values.
2. attract new advertisers.
3. bring about voluntary exchanges of values.
4. advertise new and existing services.

Answer 6

bring about voluntary exchanges of values.

Question 7

It would be incorrect to say that:

1. an organization’s image is a function of all that the organization has done as well as what it has attempted to communicate.
2. people’s images of an organization always reflect their true attitudes toward the organization.
3. an organization’s image is largely the result of public relations, advertising, selling and communication efforts.
4. responsibility for the creation of the organization’s image does not lie merely with the marketer.

Answer 7

an organization’s image is largely the result of public relations, advertising, selling and communication efforts.

Question 8

It is important to understand the consumer adoption process because:

1. the organization may be able to convince the consumer to pass over the awareness, interest and evaluation stages, moving directly to trial.
2. it is important to have the communications plan for the new product/service address the late majority and laggards as well as the innovators.
3. word of mouth and personal influence play little to no role in the consumer adoption process.
4. people differ significantly in their likelihood to try a new product/service, a factor that should affect an organization’s communications plans for its new product/service.

Answer 8

people differ significantly in their likelihood to try a new product/service, a factor that should affect an organization’s communications plans for its new product/service.

Question 9

All of the following are methods used to forecast future demand except:

1. target buyer intention surveys.
2. performance of an environmental assessment.
3. estimation of a competitor’s current customer base.
4. estimate of future demand by “middlemen.”

Answer 9

estimation of a competitor’s current customer base.

Question 10

Which of the following can be used to establish marketing budgets?

1. The affordable method
2. Objective and task method
3. Competitive-based method
4. All of the above

Answer 10

All of the above

Question 11

All of the following statements are true except that:
1.
much of the art of forecasting relies on the opinions of experts.
2.
forecasting, if correctly performed relying on technological forecasting approaches, is an exact science.
3.
forecasting includes applying the rates of anticipated future change to the current status to predict the future.
4.
qualitative data are often used in developing assumptions on which quantitative forecasting can be constructed.

Answer 11

forecasting, if correctly performed relying on technological forecasting approaches, is an exact science.

Question 12

Which of the following environmental assumptions for the next decade is not reasonable?
1.
Cost containment pressures will continue to be a dominant factor in the delivery of health services.
2.
There will be decreased morbidity (substance abuse, violence, accidents, etc.) due to increased marketing efforts and technological advances.
3.
Continued growth in new technologies will focus on cost-saving technologies that move care from inpatient settings to out-of-hospital settings.
4.
There will be continuing efforts to measure and assure quality of healthcare services.

Answer 12

There will be decreased morbidity (substance abuse, violence, accidents, etc.) due to increased marketing efforts and technological advances.

Question 13

Of the four following advertising media, which potentially has the maximum selectivity in reaching defined target audiences?
1.
Local radio
2.
Direct mail
3.
Network TV
4.
Outdoor advertising

Answer 13

Direct mail

Question 14

The major value of job analysis is that it is:

1. used to establish wage levels.
2. the best method for identifying the need for employees.
3. the cornerstone of human resources management activities.
4. valid for a long period of time.

Answer 14

the cornerstone of human resources management activities.

Question 15

Comparative methods of performance appraisal that compare one manager to another to determine performance ratings:

1. are solely based on desired organizational outcomes.
2. are time consuming and useful only for relatively small groups of employees.
3. are objective measures of performance.
4. require the use of only one rater to achieve consistency of measurement.

Answer 15

are time consuming and useful only for relatively small groups of employees.

Question 16

A system for providing reward for improvement in productivity should:

1. be group-based to reinforce teamwork and cooperation.
2. focus on nonfinancial rewards only.
3. be integrated into the organization’s employee appraisal system.
4. focus on both nonfinancial and financial rewards.

Answer 16

focus on both nonfinancial and financial rewards

Question 17

Vertical job enlargement:

1. gives individual workers responsibility for control of decision making over task-related decisions.
2. has been universally accepted by all employees.
3. must involve supervisor and subordinate in a participative process.
4. expands an individual’s job by assigning additional steps in the production process.

Answer 17

must involve supervisor and subordinate in a participative process.

Question 18

A stop-gap measure that a health service executive might use to manage intergroup conflict, which allows people to cool down and regain perspective, is:

1. smoothing.
2. bargaining.
3. integrative problem solving.
4. appealing to super ordinate goals.

Answer 18

Smoothing

Question 19

Work groups informally govern the amount and quality of work of individuals within the group through:
1.
performance norms.
2.
behavior norms.
3.
standard operating procedures.
4.
job descriptions.

Answer 19

performance norms

Question 20

As a minimum, an organization demonstrates “good faith” in collective bargaining with a union by:

1. appointing a representative who may not have the power to negotiate agreements to meet with the union.
2. rejecting union proposals without having to offer counterproposals.
3. bargaining individually with employees or offering them individual contracts even though bargaining has been requested by the majority representative.
4. receiving union proposals and meeting with the union from time to time to discuss the proposals.

Answer 20

receiving union proposals and meeting with the union from time to time to discuss the proposals.

Question 21

Large, multidisciplinary work groups with health services organizations are likely to suffer from:

1. “groupthink,” when individuals strive toward harmony and unanimity at the expense of good decision making.
2. “free-riding,” when individuals can benefit from the work of the group without making a suitable contribution.
3. “risky shift,” when individuals ignore potentially dangerous outcomes and choose high-risk alternatives.
4. “behavioral transference,” when the values and norms of other work groups are discounted.

Answer 21

“free-riding,” when individuals can benefit from the work of the group without making a suitable contribution.

Question 22

The major benefit of the integrative dimension of negotiation over the distributive dimension is that the:

1. value of the Best Alternative to a Negotiated Agreement is increased.
2. value of the Best Alternative to a Negotiated Agreement is decreased.
3. complexity of the negotiation process is simplified.
4. amount of resources to be distributed is increased, allowing both parties to reach their reservation prices.

Answer 22

amount of resources to be distributed is increased, allowing both parties to reach their reservation prices.

Question 23

As managerial vacancies occur, the availability of well-trained individuals who understand the organization’s mission, values, culture and strategy is enhanced by:
1.
the use of an executive search firm to fill managerial vacancies.
2.
rotation of managerial responsibilities among the organization’s executives.
3.
the use of an effective succession planning program.
4.
uniform management development programs for midlevel and senior-level managers.

Answer 23

the use of an effective succession planning program.

Question 24

Capital rationing in the investment decision process refers to the:

1. decision on which of the proposed capital projects will be funded.
2. decision on the total amount of funds available for capital projects.
3. decision on the financial merits of each proposal.
4. decision on the amount of funds to be borrowed for capital projects.

Answer 24

decision on which of the proposed capital projects will be funded.

Question 25

A positive net present value indicates that the investment has a rate of return:

1. higher than the discount rate used in the calculation.
2. lower than the discount rate used in the calculation.
3. equal to the discount rate used in the calculation.
4. equal to the accounting profit averaged over the life of the investment.

Answer 25

higher than the discount rate used in the calculation.

Question 26

For information on net cash flows from providing health services for a specific time frame, the decision maker should use the:

1. statement of cash flows.
2. income statement.
3. balance sheet.
4. statement of retained earnings.

Answer 26

. statement of cash flows.

Question 27

Memorial Hospital offers a screening test as a public service for $0.50 per test. Variable costs per unit are $0.32. Fixed costs are $43,200 per month for the department performing the test. It is the only test done by this special department. The break-even point in tests is:

1. 240,000 tests.
2. 172,800 tests.
3. 135,000 tests.
4. 86,400 tests.

Answer 27

240,000 tests

Question 28

The most important factor in the success of the organizational internal control system is the:

1. selection of the internal auditor.
2. selection of the CEO.
3. selection of certified public accountants for the internal auditor functions.
4. selection of the audit committee of the board.

Answer 28

selection of the internal auditor.

Question 29

Hampton Outpatient Clinic budgeted revenue from flu vaccinations at $20 per shot. Fixed costs total $5 per unit based on 4,000 shots and remain unchanged within a relevant range of 1,500 shots to 6,500 shots. Variable costs are $10 per shot. After total revenue was budgeted at $70,000, the clinic received a request from the local school district for flu vaccinations for its 1,000 students at a reasonable cost. If Hampton Clinic wants to increase operating income by $2,000, what should Hampton charge for the additional shots?

1. The variable costs plus the incremental profit margin per shot.
2. The average cost per shot plus the per-unit profit.
3. The fixed costs per shot plus the variable costs.
4. The variable costs plus the per-unit fixed cost per shot.

Answer 29

The variable costs plus the incremental profit margin per shot

Question 30

Financial risk is an element in capital investment decisions and is determined by:

1. the riskiness of the firm to the equity holders, assuming no debt financing is used.
2. the additional risk placed on the firm when debt financing is used.
3. the risk inherent in the firm’s beta coefficient as determined by industry levels.
4. the total riskiness of the firm’s return on assets (ROA) and its market portfolio.

Answer 30

the additional risk placed on the firm when debt financing is used.

Question 31

The asset turnover ratio is useful in measuring managerial performance because it indicates the:

1. amount of resources required to generate a dollar of revenue.
2. profitability per dollar of revenue.
3. effectiveness of capital structure decisions.
4. effective use of current assets.

Answer 31

amount of resources required to generate a dollar of revenue.

Question 32

A weighted average cost of capital is the:

1. accounting cost to the organization of producing all required returns to capital.
2. economic cost to the organization of producing all required returns to capital.
3. weighted average required rate of return adjusted downward in accordance with Generally Accepted Accounting Principles.
4. correct discount rate for valuing the total cash flows received by equity suppliers.

Answer 32

economic cost to the organization of producing all required returns to capital

Question 33

In general, the net present value calculations assume:

1. the discount rate is constant over the life of the decision.
2. the organization is a for-profit entity.
3. future cash flows are known with certainty.
4. borrowing and lending rates are equal with each period.

Answer 33

borrowing and lending rates are equal with each period.

Question 34

The difference between an accounting break-even point and an economic break-even point is that:
1.
the economic breakeven point provides the required rate of return to all suppliers of capital to the provider.
2.
the economic breakeven point does not recognize expense categories.
3.
the accounting breakeven point provides for total financial requirements.
4.
there is no difference.

Answer 34

the economic breakeven point provides the required rate of return to all suppliers of capital to the provider.

Question 35

Under the capitation, the risks of overutilization are shifted to the:
1.
patient receiving the health services.
2.
provider of the health services.
3.
third-party payors.
4.
health insurance company.

Answer 35

patient receiving the health services.

Question 36

Which of the following ratios would be used to estimate cash flow for a specific time period?
1. Receivable balance/
Average daily revenues for period
2. Net accounts receivable/
Gross accounts receivable
3. Cash collected during period/
Revenues for period
4. Deduction from revenue/
Gross revenue for period

Answer 36

Cash collected during period/

Revenues for period

Question 37

In developing workload measurements for estimating manpower requirements for budget preparation, the analyst should first:
1.
develop relative value units for each cost center.
2.
predict payor mix for the budget year.
3.
determine available staff for each department.
4.
forecast total admissions activity levels and patient days

Answer 37

forecast total admissions activity levels and patient days.

Question 38

Under Generally Accepted Accounting Principles, bad debts are reported as a/an:
1.
deduction from net revenue.
2.
operating expense.
3.
contractual allowance.
4.
deduction from gross revenue.

Answer 38

operating expense

Question 39

A technique used to shorten the in-house processing time of the accounts receivable cycle is a:
1.
“lock-box” agreement.
2.
line of credit arrangement.
3.
minimum balance arrangement.
4.
shortened write-off date.

Answer 39

“lock-box” agreement.

Question 40

Which of the following best describes a plan for the development of a facility’s physical plant?

1. a set of completed plans and specifications for all of the changes to be made to the physical plant.
2. a projection of the cash flow for plant-related projects.
3. a listing of the changes, sequence and costs to meet projected capacity requirements.
4. a financial feasibility study of funding alternatives for plant development.

Answer 40

a listing of the changes, sequence and costs to meet projected capacity requirements.