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AHM-520 - Health Plan Finance and Risk Management

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AHIP AHM-520 Questions Answers

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AHM-520 Questions and Answers

Question # 1

The Titanium health plan's product has a unit price of $120 PMPM and a unit variable cost of $80 PMPM. Titanium has $100,000 in fixed costs per month. This information indicates that, for its product, Titanium's

A.

Unit contribution margin is $80

B.

Unit contribution margin is $200

C.

Break-even point is 500 members

D.

Break-even point is 2,500 members

Question # 2

The Fairway health plan is a for-profit health plan that issues stock. The following data was taken from Fairway's financial statements:

Current assets.....$5,000,000

Total assets.....6,000,000

Current liabilities.....2,500,000

Total liabilities.....3,600,000

Stockholders' equity.....2,400,000

Fairway's total revenues for the previous financial period were $7,200,000, and its net income for that period was $180,000.

From this data, Fairway can determine both its current ratio and its net working capital. Fairway would correctly determine that its

A.

Current ratio is 1.39

B.

Current ratio is 2.00

C.

Net working capital equals $1,000,000

D.

Net working capital equals $3,000,000

Question # 3

The following statements are about the capital budgeting technique known as the payback method. Select the answer choice containing the correct statement:

A.

The main benefit of the payback method is that it is simple to use.

B.

The payback method measures the profitability of a given capital project.

C.

The payback method considers the time value of money.

D.

The payback method states a proposed project’s cash flow in terms of present value for the life of the entire project.

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