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Finance

Each of the following problems is a case problem that you may face as a health care manager. Write a clear response (one page minimum for each question) as if you were responding to a memo that was presented to you.  Make sure that you utilize excellent writing skills, and that your thoughts are complete.  The answers must be typed.

There will be Note that there are four (4) questions to answer and each question is worth 50 points. T Spelling, grammar, and/or typographical errors may cause you to lose points. 

Case Problem #1

You are the CEO of Lakeshore Regional Medical Center and are reviewing the planning and budgeting process for the next fiscal year, with the Finance Committee of the Board of Directors. They want to change the process and are considering options.  They have requested that you review the following options and provide them with a written response in the form of a memo. Write this memo as if you were writing to individuals that were new to these concepts.

a.    Should the budget be zero-based or conventional?

b.    Are you in favor of a top-down or bottom-up process?

c.    Should the budget be fixed or flexible?

d.    Explain the purpose of variance analysis to the Board members.

e.    Explain to the Board members how planning and budgeting are linked.

Case Problem #2

MEMORANDUM

TO:        BILL RIGHT, RADIOLOGY DIRECTOR

FROM:        JEFF BROWN, CFO

SUBJECT:    CAPITAL BUDGET

DATE:        xx/xx/xxxx

____________________________________________________

I need your assistance in preparing the capital budget for the hospital. It is my understanding that the CAT scanner needs replacement during the next fiscal year. Please explain, via a return memo, the financial analysis that you have conducted to determine the viability of the replacement project. Be sure, to explain how cash flow analysis and breakeven analysis affect this decision.

Case Problem #3

You are the Administrator of the Community Medicine Group. You and your CPA have decided to implement a planning and budgeting program for the group practice. Please explain the process you would use and the type or types of budgets that you would develop and why.

Case Problem #4

You are attending a meeting with the Board of Directors of the Community Medicine Group. The doctors are concerned about the large amount of cash that accumulates in the practice checkbook for long periods. Explain to them cash management and how you think they might approach putting this money to work earning interest.

 

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