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3 years ago

Ratio analysis of two competing not-for-profit hospitals revealed the following values:

Business

1 answer:

Vinvika [58]3 years ago

7 0

Answer:

The correct option is b. Based on Liabilities to Fund Balance, Southwest Hospital is more solvent than Milestone Hospital.

Explanation:

Note: There is a mistake in the options given in the question as the names of the hospitals in the options are different from the ones in the data provided. The correct options are therefore provided before answering the question as follows:

Based on these data, which of the following is an accurate conclusion?

a. Based on Liabilities to Fund Balance, Milestone Hospital is more solvent than Southwest Hospital.

b. Based on Liabilities to Fund Balance, Southwest Hospital is more solvent than Milestone Hospital.

c. Based on the Current Ratio, Milestone Hospital is more solvent than Southwest Hospital.

d. Based on the Current Ratio, Southwest Hospital is more solvent than Milestone Hospital

Explanation of the answer is now given as follows:

First is that a current ratio is a liquidity ratio not a solvency ratio. Therefore, options c and d are NOT correct.

Solvency ratio measures the extent which the fund balance can pay the liabilities of a not-for-profit organization.

The lower the Liabilities to Fund Balance, the more solvent a not-for-profit organization is.

Since the 1,78 Liabilities to Fund Balance of Southwest Hospital is lower than 2.45 Liabilities to Fund Balance of Milestone Hospital, it therefore implies that the correct option is b. Based on Liabilities to Fund Balance, Southwest Hospital is more solvent than Milestone Hospital.

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What is the overriding goal of financial management?

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2 years ago

Private solutions to correct for externalities Consider the following scenario: Suppose that a chicken farm uses a nearby stream

Firdavs [7]

Answer:

Explanation:

The activities of the chicken firm constitutes a negative externality to the environment

A good has negative externality if the costs to third parties not involved in production is greater than the benefits. an example of an activity that generates negative externality is pollution. Pollution can be generated at little or no cost, so they are usually overproduced. Government can discourage the production of activities that generate negative externality by taxation. Taxation increases the cost of production and therefore discourages overproduction. Tax levied on externality is known as Pigouvian tax.

Government can regulate the amount of externality produced by placing an upper limit on the amount of negative externality permissible

Coase theorem has been proposed as a solution to externality. According to this theory, when there are conflicting property rights, bargaining between parties involved can lead to an efficient outcome only if the bargaining cost is low

Another solution to negative externality is through the activities of charities. Charities can raise donations to limit or regulate the activities of firms that constitutes a negative externality. This is the solution employed here.

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3 years ago

Gerald is a mechanical engineer who can examine and detect a problem, determine cause and effect, and provide a solution. gerald

Ede4ka [16]

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3 years ago

Individual policies are generally stand-alone policies, but may be written with other types of policies as a(n): a. Endorsement

Romashka-Z-Leto [24]

Answer:

The correct answer is letter "B": Rider.

Explanation:

A rider policy adds or restricts terms to an already existing insurance policy. This is typically used when the policyholder includes in the original coverage some others such as life, home, and auto insurance. Rider policies are typically low priced and in most cases are offered by the same insurance companies at a special discount to promote consumption among their insured.

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3 years ago

Scottso Corporation applies overhead using a normal costing approach based upon machine-hours. Budgeted factory overhead was $26

seropon [69]

Answer:

Overhead application rate

= Budgeted overhead

Budgeted machine hours

= $266,400

18,500 hours

= $14.40 per machine hour

Overhead applied

= Overhead application rate x Actual machine hours

= $14.40 x 19,050 hours

= $274,320

Under-applied overhead

= Overhead applied - Actual factory overhead

= $274,320 - $287,920

= $13,600

Explanation:

In this question, there is need to determine the overhead application rate, which is the ratio of budgeted factory overhead to budgeted machine hours. Then, we will calculate the overhead applied, which is overhead application rate multiplied by actual machine hours. Under-applied overhead is the difference between overhead applied and actual factory overhead. .

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3 years ago