If WiseGuy Inc

question 17

Multiple Choice

If WiseGuy Inc. is choosing one of the above mutually exclusive projects (Project A or Project B) , given a discount rate of 7%, which should the company choose?

• A) Project A
• B) Project B
• C) Neither project — both have negative NPV.
• D) Both projects — both have positive NPV.

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Definitions:

Retrospective Reimbursement

A payment model where healthcare providers are paid after services are delivered, based on the costs of the provided services.

Fee-For-Service

A payment model where services are unbundled and paid for separately, often seen in healthcare settings.

Cost-Efficient

Economically advantageous, achieving the best possible outcome or value with the least waste of resources or effort.

Community Rating

A pricing strategy where health insurance premiums are not based on an individual’s health status or age but are the same for all members of a community.