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I NEED ACCOUNTING HELP ASAP!
FIRST SET OF PROBLEMS:
Assume Venture Healthcare sold bonds that have a 10 year maturity, a 12 percent coupon rate with annual payments, and a $1,000 par value. Suppose that two years after the bonds were issued the required interest rate fell to 7%.
a. What would be the bond’s value?
b. Suppose that two years after the bonds were issued, the required interest rate rose to 13%. What would be the bonds value?
c. What would be the value of the bonds three years after issue if the bond rate is 7% assuming that interest rates stayed steady at either 7% or 13%?
Twin Oaks Health Center has a bond issue outstanding with a coupon rate of 7% and four years remaining until maturity. The par value of the bond is $1,000, and the bond pays interest annually.
a. Determine the current value of the bond if present market conditions justify a 14% required rate of return?
b. Now suppose Twin Oaks four year bond had semiannual coupon payments. What would be its current value? (Assume a 7% semiannual required rate of return. The actual rate would be slightly less than 7% because a semiannual coupon bond is slightly less risky than an annual coupon bond.)
c. Assume that Twin Oaks bond had a semiannual coupon but 20 years remaining to maturity. What is the current value under these conditions? (Assume a 7% semiannual required rate of return although the actual rate would probably be greater than 7% because of increased risk.)
Minneapolis Health System has bonds outstanding that have four years remaining to maturity, a coupon interest rate of 9% paid annually and a $1,000 par value.
a. What is the yield to maturity on the issue if the current market price is $829?
b. If the current market price is $1,104
c. Would you be willing to buy one of these bonds for $829 if you required a 12% rate of return on the issue?
d. Explain your answer.
Six years ago Bradford Community Hospital issued 20-year municipal bonds with a 7% annual coupon rate. The bonds were called today for a $70 call premium – that is, bondholders received $1,070 for each bond.
a. What is the realized rate of return for those investors who bought the bonds for $1,000 when they were issued?
A person is considering buying the stock of two home health companies that are similar in all respects except the proportion of earnings paid out as dividends. Both companies are expected to earn $6 per share in the coming year, but Company D (for dividends) is expected to pay out the entire amount as dividends, while Company G (for growth) is expected to pay out only one third of its earnings or $2 per share. The companies are equally risky and their required rate of return is 15%. D’s constant growth rate is zero and G’s is 8.33.
a. What are the intrinsic values of stocks D and G?
Medical Corporation of America (MCA) has a current stock price of $36 and its last dividend was (D0)$2.40. In view of MCA’s strong financial position, its required rate of return is 12%.
a. If MCA’s dividends are expected to grow at a constant rate in the future, what is the firm’s expected stock price in five years?
A broker offers to sell your shares of Bay Area Healthcare which just paid a dividend of $2 per share. The dividend is expected to grow at a constant rate of 5% per year. The stock’s required rate of return is 12%.
a. What is the expected dollar dividend over the next three years?
b. What is the current value of the stock and the expected stock price at the end of each of the next three years?
c. What is the expected dividend yield and capital gains yield for each of the next three years?
d. What is the expected total return for each of the next three years?
e. How does the expected total return compare with the required rate of return on the stock?
f. Does this make sense?
g. Explain your answer.
Lucas Clinic’s last dividend (D0 ) was $1.50. Its current equilibrium stock price is $15.75, and its expected growth rate is a constant 5%.
a. If the stockholders’ required rate of return is 15% what is the expected dividend yield and expected capital gains yield for the coming year?
SECOND SET OF PROBLEMS:
Here are the budgets of Brandon Surgery Center for the most recent historical quarter (in thousands of dollars):
Static Flexible Actual
Number of surgeries 1,200 1,300 1,300
Patient revenue $2,400 $2,600 $2,535
Salary expense $1,200 $1,000 $1,365
Non salary expense $ 600 $ 650 $ 585
Profit $ 600 $ 650 $ 585
The center assumes that all revenues and costs are variable and hence tied directly to patient volume.
a. Explain how each amount in the flexible budget was calculated.
b. Determine the variance for each line of the profit and loss statement in both dollar terms and percentage terms (Each line has a total variance, a volume variance, and a price variance [for revenues] and management variances [for expenses].
c. What do the part b results tell Brandon’s managers about the surgery centers operations for the quarter?
QUESTION 2 CAROLL CLINIC: NEW 2011 RESULTS
A. FSS 34,000 visits
B. Capitated lives 30,000 members
Number of member months 360,000
Actual utilization per
Member per month
Member per month 0.12
Number of visits 43,200 visits
C. Total actual visits 77,200 visits
A. FFS $28 visit
X 24,000 actual visits
B. Capitated lives $ 2.75 PMPM
X 360,000 actual member visits
C. Total actual revenues $1,942,000
A. Variable costs:
Labor $1,242,000 (46,000 hours at $27/visit)
Supplies $ 126,000 (90,000 units at $1.40/unit)
Total variable costs: $ 17.72 ($1,368,000 x 77,200)
B. Fixed costs:
And equipment $525,000
C. Total actual costs: $1,893,000
Profit and Loss Statement:
Contribution margin $574,000
Fixed Costs $525,000
Actual profits $49,000
a. Construct the flexible budget for 2011.
b. What are profit variance?
What is the cost variance?
Consider the revenue variance. What is the component volume variance?
What is the price variance?
Break down the management variance into labor, supplies, and fixed costs variances.
Provide the following information regarding a dental practice:
Write a 10-12 page paper in which you:
1. Determine what your selected organization would need to take into account when making pricing and service decisions.
2. Describe the overall planning process and the likely components of the selected organization’s financial plan. Be sure to include a discussion as to how you arrived at the answers and use specific examples to illustrate your response.
3. Discuss how time value analysis would help your organization make sound management decisions, use specific examples to illustrate your response.
4. Recommend a major investment for the organization you selected using net present value, pertinent financial ratios, and break-even analysis.
5. Determine the most likely way your selected organization should address financial risk and required returns.
6. Provide at least four (4) qualified resources e.g. peer-reviewed journals, professional organization websites, or health care provider websites. The cover page and reference page are not included in the required length of the paper.
Your assignment must be typed, double spaced using Times New Roman font size 12 with one inch margins on all sides; paper must follow APA formatting Paper must include a traditional header with running header on title page, and page numbers.
Include a cover page that includes:
a. Title of paper: Planning and Budgeting
b. Name of student: Kimberly A. Fahringer
c. Course title: HAS 525 Health Care Finance
d. Professor’s name: Dr. James Coon
e. Date (due May 11, 2012)
The goals of this assignment are:
Describe the overall planning process and the key components of the financial plan
Develop a competence in making financial decisions using net value, pertinent financial ratios, and break-even analysis
Explain why time value analysis is so important to health care financial management
Use technology and information resources to research issues in health financial management
Write clearly and concisely about health financial management using proper writing techniques.
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Solution is attached
body preview (7 words)
xxxxxx xxxx xxx solution files attached here.
file1.xls preview (89 words)
|xxx xxxxx xxxx xxxxxxxx Community Hospital issued xxxxxxx xxxxxxxxx bonds xxxx a x percent xxxxxx|
|xxxxxx xxxxx xxx xxxxx were called today for a xxx call premium--that xxx xxxxxxxxxxx received $1,070|
|for xxxx xxxxx xxxx xx the realized rate xx return xxx those investors who xxxxxx xxx xxxxx xxx $1,000|
|when xxxx were xxxxxxx|
|xxxx xxxxxx||x 1,070|
|Purchase xxxxxx||* xxxxx|
|Call xxxxxx||6x||Realized return over the time period is annualized return calculated|
|Realized xxxxxx||8.0%||xxxxx xxx RATE function xxxxxx xxxx account the xxxxxxxx xxxxxx annual interest and xxxx price|
file2.xls preview (1154 words)
|Chapter 6 -- xxxxxx Financing and xxxxxxxxxx xxxxxxx|
|xxxxxxx x xx xxxxxxxxxx xxxxxxxxxx Market xxxxxxxxxxx xxx Debt xxxxxxxxx|
|A broker xxxxxx to sell you xxxxxx of Bay xxxx Healthcare, xxxxx just paid a dividend xx $2 per xxxxxx|
|The dividend xx expected to grow xx a xxxxxxxx xxxx of 5 percent xxx year. xxx stock's xxxxxxxx rate of|
|xxxxxx is 12 percent.|
|a. What xx xxx expected dollar dividend xxxx xxx xxxx three years?|
|b. What is the xxxxxxx value xx the stock xxx the xxxxxxxx xxxxx price xx the end xx xxxx xx the xxxx xxxxx|
|xx xxxx xx the xxxxxxxx xxxxxxxx xxxxx and capital gains yield for xxxx of xxx next xxxxx xxxxxx|
|xx xxxx xx the xxxxxxxx total xxxxxx for each xx the xxxx xxxxx xxxxxx xxx does xxx xxxxxxxx xxxxx xxxxxx|
|compare xxxx the required rate of return xx xxx stock? xxxx xxxx xxxx xxxxxx Explain your answer.|
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file3.doc preview (3222 words)
FIRST xxx xx xxxxxxxxx
xxxxxxxxxx 1�xxxxxx xxxxxxx xxxxxxxxxx sold bonds that xxxx a 10 year maturity, x xx xxxxxxx coupon rate xxxx annual payments, xxx a xxxxxx par value. xxxxxxx that xxx years after the xxxxx xxxx issued the xxxxxxxx interest xxxx xxxx xx 7%.�a. What would xx xxx xxxx’x value?�b. xxxxxxx that two years after the xxxxx were xxxxxxx xxx required xxxxxxxx xxxx rose to xxxx What xxxxx be xxx xxxxx xxxxxxxxxxx What xxxxx xx the xxxxx xx the xxxxx xxxxx xxxxx xxxxx issue if xxx bond rate is xx xxxxxxxx that xxxxxxxx xxxxx xxxxxx xxxxxx at either xx xx xxxxxxx
a. What would be the bond’s xxxxxx
xxxxxxxxx + xxxx xxxxxxx= $1290
xxx Suppose that xxx yrs after the xxxxx xxxx xxxxxxx xxx xxxxxxxx xxxxxxxx rate xxxx xx xxxxxxxx would xx the bond's value?
120*4.7988 x xxxx xxxxxxx= xxxx
(C) What xxxxx xx xxx xxxxx xx xxx xxxxx x xxx xxxxx xxxxx in xxxx xxxxxxxx xxxxxx assuming that interest rates stayed at xxxxxxxx or 13%?
120*5.3893 + 1000 *.6227 x
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