Claudia Is an Administrator of a Hospital

question 46

Multiple Choice

Claudia is an administrator of a hospital.She has a department that has personnel issues with hostile behavior.Claudia knows that if she incorporates anger-management treatments for the staff in this department,the company's insurance will save the following just in hospitalization costs in the following 6 months:

• A)For every 2 dollars spent,there is a savings of 6 dollars.
• B)For every dollar spent,there is 2 dollars saved.
• C)For every 20 dollars,10 dollars is saved.
• D)No money will be saved,as anger-management treatments will not affect health care costs.

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Definitions:

Net Present Values

A method of evaluating the profitability of an investment by calculating the present value of all expected future cash flows minus the initial investment cost.

Capital Budgeting

Capital budgeting is the process a business undertakes to evaluate potential major projects or investments, analyzing the profitability and risk to decide whether they should proceed.

Worst-case Scenario

A situation where the worst possible outcome occurs, often used in planning and analysis to prepare for and mitigate risks.

Scenario Analysis

A process of analyzing future events by considering alternative possible outcomes (scenarios), often used for strategic planning to understand potential risks and opportunities.