finance and accounting question Detail:7.1 Assume that the managers of Fort Winton Hospital are setting the price on a new outpatient service. Here are relevant data estimated:Variable cost per visit $5.00Annual direct fixed costs $500.000Annual overhead allocation $50,000Expected annual utilization 10,0007.2 The audiology dept. at Randall Clinic offers many services to the clinics patients. The three most common, along with cost ant utilization data, are as follows:Annual DirectAnnual #ServiceV.C. per serviceFixed Costsof VisitsBasic examination5.00$ 50,000.003,000Advanced examination7.00$ 30,000.001,500Therapy session10.00$ 40,000.005007.3 Allied Laboratories is combining some of its most common tests into one price packages One such package will contain three test that have the following variable cost:Test ATest BTest CDisposable syringe3.003.003.00Blood vial0.500.500.50Forms0.150.150.15Reagents0.800.601.20Sterile bandage0.100.100.10Breakage. Losses0.050.050.057.4 Assume that Valley Forge Hospital has only the following three payer groups:# ofAveg RevVCPayerAdmissionsper AdmissionofAdmissionPennCare100050003000Medicare400045004000Commercial800070002500What is the hospitals net income?What PMPM rate will the hospital have to charge to retain its Part a net income?What overall net income would be produced if the admission rate of the capitated group were reduced from the commercial level by 10 percent?

Assuming that the utilization reduction also occurs, what overall net income would be produced if the variable cost per admission for the capitated group were lowered to 2,200?8.1 Consider the following 2011 data for Newark General Hospital (in millions of dollars):StaticFlexibleActualBudgetBudgetResultsrevenue4.74.84.4costs4.14.14.2profits0.60.70.3Calculate and interpret the profit variance.Calculate and interpret the revenue varianceCalculate and interpret the cost varianceCalculate and interpret the volume and price variance on the revenue sideCalculate and interpret the volume and management variance on the cost side.Revenue variance = actual revenue- static revenuestaticFlexibleFlexibleactualbudgetenroll/utilizeenrollresults4252001803008.2 Here are the 2011 revenue for the Wendover Group Practice Association for four different budgets.What does the budget data tell you about the nature of Wendovers patients: are they capitated or fee-for-service?Calculate and interpret the following variance:Revenue varianceVolume variancePrice varianceEnrollment varianceUtilization variance8.3 Here are the budges of Brandon Surgery Center for the most recent historical quarter.staticflexibleactualNumber of surgeries120013001300patient revenue240026002535salary expense120013001365non salary expense600650585Profit600650585Explain how each amount in the flexible budget was calculated.Determine the variance for each line of the profit and loss statement, total variance, a volume variance, and a price variance.What do the Part b result to Brandons managers about the surgery centers operations for the quarter?HSA 525: HealthCare FinanceWeek 5 Chapter 11 and 12 Homework

Due: May 13thChapter 11: Problems 11-1, 11-2, 11-5, and 11-6Problem 11-1Assume Venture Healthcare sold bonds that have a 10-year maturity, a 12 percent coupon rate with annual payments, and a $1,000 par value.Suppose that two years after the bonds were issued, the required interest rate fell to 7 percent. What would be the bonds value?Suppose that two years after the bonds were issued, the required interest rate rose to 13 percent. What would be the bonds value?What would be the value of the bonds three years after issue in each scenario above, assuming that interest rates stayed steady at either 7 percent or 13 percent?Problem 11-2Twin Oaks Health Center has a bond issue outstanding with a coupon rate of 7 percent and four years remaining until maturity. The par value of the bond is $1,000, and the bond pays interest annually.Determine the current value of the bond if present market conditions justify a 14 percent required rate of return.Now, suppose Twin Oaks four-year bond had semiannual coupon payments. What would be its current value? (Assume a 7 percent semiannual required rate of return. However, the actual rate would be slightly less than 7 percent because a semiannual coupon bond is slightly less risky than an annual coupon bond.)Assume that Twin Oaks bond had a semiannual coupon but 20 years remaining to maturity. What is the current value under these conditions? (Again, assume a 7 percent semiannual required rate of return, although the actual rate would probably be greater than 7 percent because of increase price risk.)Problem 11-5Minneapolis Health System has bonds outstanding that have four years remaining to maturity, a coupon interest rate of 9 percent paid annually, and a $1,000 par value.What is the yield to maturity on the issue if the current market price is $829?If the current market price is $1,104?Would you be willing to buy one of these bonds for $829 if you required a 12 percent rate of return on the issue? Explain your answer.Problem 11-6Six years ago, Bradford Community Hospital issued 20-year municipal bonds with a 7 percent annual coupon rate. The bonds were called today for a $70 call premiumthat is, bondholders received $1,070 for each bond. What is the realized rate of return for those investors who bough the bonds for $1,000 when they were issued?Chapter 12: Problems 12-1, 12-2, 12-3, and 12-7Problem 12-1A person is considering buying the stock of two home health companies that are similar in all respects except the proportion of earnings paid out as dividends. Both companies are expected to earn $6 per share in the coming year, but Company D (for dividends) is expected to pay out the entire amount as dividends, while Company G (for growth) is expected to pay out only one-third of its earnings, or $2 per share. The companies are equally risky, and their required rate of return is 15 percent. Ds constant growth rate is zero and Gs is 8.33 percent. What are the intrinsic values of stocks D and G?Problem 12-2Medical Corporation of America (MCA) has a current stock price of $36 and its last dividend (D0) was $2.40. In view of MCAs strong financial position, its required rate of return is 12 percent.If MCAs dividends are expected to grow at a constant rate in the future, what is the firms expected stock price in five years?Problem 12-3A broker offers to sell you shares of Bay Area Healthcare, which just paid a dividend of $2 per share. The dividend is expected to grow at a constant rate of 5 percent per year. The stocks required rate of return is 12 percent.What is the expected dollar dividend over the next three years?What is the current value of the stock and the expected stock price at the end of the next three years?What is the expected dividend yield and capital gains yield for each of the next three years?What is the expected total return for each of the next three years?How does the expected total return compare with the required rate of return on the stock? Does this make sense? Explain your answer.Problem 12-7Lucas Clinics last dividend (D0) was $1.50. Its current equilibrium stock price is $15.75, and its expected growth rate is a constant 5 percent. If the stockholders required rate of return is 15 percent, what is the expected dividend yield and expected capital gains yield for the coming year?7.1 Assume that the managers of Fort Winton Hospital are setting the price on a new outpatient service. Here are relevant data estimated:Variable cost per visit $5.00Annual direct fixed costs $500.000Annual overhead allocation $50,000Expected annual utilization 10,0007.2 The audiology dept. at Randall Clinic offers many services to the clinics patients. The three most common, along with cost ant utilization data, are as follows:Annual DirectAnnual #ServiceV.C. per serviceFixed Costsof VisitsBasic examination5.00$ 50,000.003,000Advanced examination7.00$ 30,000.001,500Therapy session10.00$ 40,000.005007.3 Allied Laboratories is combining some of its most common tests into one price packages One such package will contain three test that have the following variable cost:Test ATest BTest CDisposable syringe3.003.003.00Blood vial0.500.500.50Forms0.150.150.15Reagents0.800.601.20Sterile bandage0.100.100.10Breakage. Losses0.050.050.057.4 Assume that Valley Forge Hospital has only the following three payer groups:# ofAveg RevVCPayerAdmissionsper AdmissionofAdmissionPennCare100050003000Medicare400045004000Commercial8000700025008.1 Consider the following 2011 data for Newark General Hospital (in millions of dollars):StaticFlexibleActualBudgetBudgetResultsrevenue4.74.84.4costs4.14.14.2profits0.60.70.3staticFlexibleFlexibleactualbudgetenroll/utilizeenrollresults4252001803008.2 Here are the 2011 revenue for the Wendover Group Practice Association for four different budgets.Revenue varianceVolume variancePrice varianceEnrollment varianceUtilization variance8.3 Here are the budges of Brandon Surgery Center for the most recent historical quarter.staticflexibleactualNumber of surgeries120013001300patient revenue240026002535salary expense120013001365non salary expense600650585Profit600650585HSA 525: HealthCare FinanceWeek 5 Chapter 11 and 12 Homework Due: May 13thChapter 11: Problems 11-1, 11-2, 11-5, and 11-6Problem 11-1Assume Venture Healthcare sold bonds that have a 10-year maturity, a 12 percent coupon rate with annual payments, and a $1,000 par value.Problem 11-2Twin Oaks Health Center has a bond issue outstanding with a coupon rate of 7 percent and four years remaining until maturity. The par value of the bond is $1,000, and the bond pays interest annually.Problem 11-5Minneapolis Health System has bonds outstanding that have four years remaining to maturity, a coupon interest rate of 9 percent paid annually, and a $1,000 par value.Problem 11-6Six years ago, Bradford Community Hospital issued 20-year municipal bonds with a 7 percent annual coupon rate. The bonds were called today for a $70 call premiumthat is, bondholders received $1,070 for each bond. What is the realized rate of return for those investors who bough the bonds for $1,000 when they were issued?Chapter 12: Problems 12-1, 12-2, 12-3, and 12-7Problem 12-1A person is considering buying the stock of two home health companies that are similar in all respects except the proportion of earnings paid out as dividends. Both companies are expected to earn $6 per share in the coming year, but Company D (for dividends) is expected to pay out the entire amount as dividends, while Company G (for growth) is expected to pay out only one-third of its earnings, or $2 per share. The companies are equally risky, and their required rate of return is 15 percent. Ds constant growth rate is zero and Gs is 8.33 percent. What are the intrinsic values of stocks D and G?Problem 12-2Medical Corporation of America (MCA) has a current stock price of $36 and its last dividend (D0) was $2.40. In view of MCAs strong financial position, its required rate of return is 12 percent.If MCAs dividends are expected to grow at a constant rate in the future, what is the firms expected stock price in five years?Problem 12-3A broker offers to sell you shares of Bay Area Healthcare, which just paid a dividend of $2 per share. The dividend is expected to grow at a constant rate of 5 percent per year. The stocks required rate of return is 12 percent.Problem 12-7Lucas Clinics last dividend (D0) was $1.50. Its current equilibrium stock price is $15.75, and its expected growth rate is a constant 5 percent. If the stockholders required rate of return is 15 percent, what is the expected dividend yield and expected capital gains yield for the coming year?