Which of the Following Is True

question 6

Multiple Choice

Which of the following is true?

• A) The majority of nursing homes are run on a for-profit basis.
• B) Men are more likely than women to eventually need nursing home care.
• C) Nursing homes now treat a healthier mix of patient than they did 20 years ago.
• D) Since the passage of Medicare, the number of nursing homes has declined.
• E) Nursing homes are staffed primarily by doctors.

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Definitions:

Variable Cost Ratio

The proportion of variable costs to total sales, indicating how variable costs change with sales levels.

Bond Issue

The process by which a borrower issues bonds to raise funds from investors willing to lend them money for a certain period.

Operating Leverage (DOL)

Operating leverage measures how revenue growth translates into growth in operating income. It is a measure of how sensitive the operating income is to the change in revenues.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent or salaries.