CPE Financial Management and Business Strategy 2

Question 1

A hospital is evaluating whether to lease or purchase an MRI machine. Which financial analysis best compares the two options?

Accepted Answer

Net present value analysis of lease vs. purchase cash flows

Answer

NPV analysis accounts for the time value of money and compares total costs of each financing option across the same period.

Question 2

Which metric measures how efficiently a hospital uses its assets to generate revenue?

Accepted Answer

Asset turnover ratio

Answer

Asset turnover ratio is calculated as total revenue divided by total assets, reflecting operational efficiency.

Question 3

A physician executive notices that accounts receivable days outstanding has increased from 45 to 72 days. This most likely indicates:

Accepted Answer

Deteriorating revenue cycle performance

Answer

Rising days in accounts receivable signals slower collection, which strains cash flow and may indicate billing or payer issues.

Question 4

In a SWOT analysis for a physician group considering expansion, a new competitor hospital entering the market would be categorized as:

Accepted Answer

Threat

Answer

External factors that may negatively impact the organization are classified as threats in a SWOT analysis.

Question 5

Which of the following best describes a 'contribution margin' in healthcare financial management?

Accepted Answer

Revenue minus variable costs for a specific service line

Answer

Contribution margin equals revenue minus variable costs, showing how much a service contributes to covering fixed costs.

(CPE) Certified Physician Executive Practice Test