Assignment
Read Chapters 14 & 15 from Gapenski, L. C. (2012). Healthcare finance: An introduction to accounting and financial management. Chicago, Ill:
Chapter 14 explains how managers use project classifications and post-audits in the capital budgeting process. In addition, the chapter covers the role of financial analysis in health services capital budgeting decisions and key issues involved in cash flow estimation. Finally, the chapter covers the usefulness and methods applied in breakeven and profit - ability analyses and the basic capital budgeting analyses.
Chapter 15 Describe the three types of risk relevant to capital budgeting decisions and the advantages and disadvantages of sensitivity analysis. The chapter also covers the advantages and disadvantages of scenario analysis and how to conduct a project risk assessment. Finally, the chapter covers risk in the capital budgeting decision process.
Read Chapter 8 from Gapenski, L. C. (2012). Healthcare finance: An introduction to accounting and financial management. Chicago, Ill:
Chapter 8 explains the importance of proper cost allocation to health services organizations. The chapter also covers cost driver, and the characteristics of a good driver as opposed to a poor one, and primary method used to allocate overhead costs.**
This Competency Assessment assesses the following outcome(s):
• Explain the methodologies used in preparing budgets for health care organizations.
Utilizing your textbook and the Library:
• Describe the role of financial analysis in health services capital budgeting decisions.
By answering the following questions:
i. Explain the key issues involved in cash flow estimation?
ii. Describe the usefulness and methods applied in breakeven and profitability analysis?
iii. What is the role of financial analysis in capital budgeting decision making within for-profit firms?
iv. Why is project financial analysis important in not-for-profit businesses?
v. Explain the four steps in capital budgeting financial analysis?
vi. Why should projects with high expected profitability be viewed with some skepticism?
Format your assignment according to the following formatting requirements:
i) The answer should be typed, using Times New Roman font (size 12), double spaced, with one-inch margins on all sides.
ii) The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
iii) Also include a reference page. The Citations and references must follow APA format. The reference page is not included in the required page length.