Timothy Moore, Managing Director of Tiles Ltd, Has Received a Report

question 35

Multiple Choice

Timothy Moore, Managing Director of Tiles Ltd, has received a report from his Finance Manager recommending four investment projects for his approval. However, the firm has only sufficient funds to invest in one project. The firm's rate of return is 6%. The accounting rate of return for each project is: A - 12%, B - 9%, C - 13%, D - 15%. Short will select:

• A)Project A.
• B)Project B.
• C)Project C.
• D)Project D.

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Definitions:

Preauthorization

Authorization or approval for payment from a third-party payer requested in advance of a specific procedure.

Third-party Payer

An entity (usually an insurance company or government agency) that pays medical expenses on behalf of the patient.

Elective Procedure

A medical procedure that is not required to sustain life but is requested for payment to the third-party payer by the patient or physician. Some elective procedures are paid for by third-party payers, whereas others are not.

Predetermination

The act of deciding or establishing something in advance or having a predetermined outcome.