True or False:
1. In general, the best way to allocate costs in a large organization is to assign all overhead expenses to a single cost pool with one cost driver.
2. Many studies have demonstrated that integrated delivery systems are able to provide higher-quality care at lower cost than can stand-alone specialized provider organizations.
3. Moral hazard is the risk that a health insurer will not pay for covered services.
4. Other things held constant, an increase in the project cost of capital will cause a decrease in the project's internal rate of return (IRR)
5. Sensitivity analysis measures the risk of a project by showing how much the project's NPV is affected by changes in the input variables such as volume and labor costs. Other things held constant, with changes in the input variable plotted on the horizontal axis and NPV on the vertical axis; the steeper the sensitivity line, the more sensitive the project's profitability is to the input variable.
6. The best way to incorporate inflation effects in a project's cash flows is to assume neutral inflation; that is, to assign the same rate of inflation to all cash flows.
7. The corporate cost of capital provides a benchmark for determining a project's cost of capital. In general, projects that are riskier than average must have a cost of capital that is higher than the corporate cost of capital, while projects that are less risky than average must have a cost of capital that is less than the corporate cost of capital.
8. The four Cs (character, capability, charisma, and courtesy) summarize the attributes needed to be a good financial manager.
9. The operating plan focuses on how a business plans to meet the goals and objectives contained in the strategic plan.
10. The primary goal of not-for-profit corporations generally is expressed in a mission statement and often involves service to the community.