The most critical and most difficult step in evaluating investment proposals is:

ID: 2772778 • Letter: T

Question

a. incremental cash flows

b. cash flow timing

c. cash flow estimation

d. Cash flow analysis

Cash flows are analogous with accounting income.

Select one:

a. True

b. False

Regarding cash flow estimation, which of the following statements is correct?

Select one:

a. Opportunity costs are not included in a capital investment analysis.

b. In estimating future cash flows of a project, any effects of existing service lines are ignored.

c. It is important for the cash flow analysis to include any inflation effects into future projected cash flows.

d. When acquiring new (large) equipment, only the purchase price of the equipment itself is used for cash flows analysis purposes.

When estimating cash flows, sunk costs are to be ignored and should not bias the outcome decision.

Select one:

a. True

b. False

Which approach allows healthcare leaders to assess potential initiatives by evaluating both financial and non-financial factors?

Select one:

a. payback period

b. net present value (NPV)

c. project scoring

d. internal rate of return (IRR)

(1)(C) Cash Flow Estimation

The most critical and most difficult step in evaluating investment proposals is to estimate expected Cash Flow.

(2) (a) True

Free Flow Cash flows are analogous with accounting income

(3) (C) It is important for the cash flow analysis to include any inflation effects into future projected cash flows.

(4) (a) True,

Sunk Costs have no bearing on current or future decisions hence sunk costs are to be ignored and should not bias the outcome decision.

(5)(a) payback period

Pay Back Period allows healthcare leaders to assess potential initiatives by evaluating both financial and non-financial factors

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