Finance Trends

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timer Asked: Oct 17th, 2018
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Question Description

Write a 700- to 1,050-word paper in which you:

  • Analyze a financial and economic issue in the health care industry.
    • Choose a current financial or economic issue in the health care industry. Consider the following:
      • What are the economic trends of the health care payment system?
      • What are the supply and demand challenges for health care services?
      • Why are costs increasing in the health care system?
      • What regulatory issues are affecting, or will affect, the health care industry?
    • Analyze the issue and its financial impact on the health care industry.
    • Provide recommendations for improving the issue. Consider current strategies being used or presented for improving the issue.
      • Include what you believe would be the outcome of these recommendations if implemented.

Cite 3 peer-reviewed, scholarly, or similar references to support your paper.

Format your paper according to APA guidelines.

Note: While you identified issues in the Week Two Finance Environment assignment, you must explore them in more detail and depth in this assignment.

WEEK 2 ASSIGNMENT IS ATTACHED FOR REFERENCE

Unformatted Attachment Preview

Week Two Financial Exercises Part 1 Complete the following problems using either the financial functions in Excel or the Present Valu PV = FV * 1 / (1+i)^n FV = PV * (1+i)^n (1) If you wish to have $60,000 in 8 years, how much do you need to deposit in the bank today if the accou Answer: PV=60,000*1/(1+9%)^8= 30,111 (2) What will $110,000 grow to be in 9 years if it is invested today at 11%? Answer:FV=110,00*(1+11%)^9= 281,384 (3) (4) You would like to have $200,000 in a college fund in 15 years. How much do you need today if you ex investing to pay for your child’s college? Answer:PV=200,000*1/(1+12%)^15= 36,539 You have been offered $3,000 in 4 years for providing $2,000 today into a business venture with a frien this a good investment for you? Answer:3,000=2,000*(1+10%)^4=2,928.2 Which means that it wouldn't be good invertment becuause years. (5) What will $82,000 grow to be in 11 years if it is invested today at 8% and the interest rate is compound Answer:A=82,000(1+8%/12)^132=197117.28 (6) How many years will it take for $136,000 to grow to $468,000 if it is invested in an account with an ann Answer:it would take16 years (7) At what interest rate must $112,000 be invested so that it will be worth $392,000 in 14 years? Answer: The interest rate would be 9.5% al Exercises s in Excel or the Present Value and Future Value formulas as noted below: t in the bank today if the account pays an interest rate of 9%? uch do you need today if you expect to earn 12% while you are a business venture with a friend. If interest rates are 10%, is t be good invertment becuause they won't be making 3,000 in 4 d the interest rate is compounded monthly? ested in an account with an annual interest rate of 8% $392,000 in 14 years? Week Two Financial Exercises Part 2 Complete the following problems: (1) Calculate the Net Present Value (NPV) of the following cash flow stream if the required rate is 12%: Year Cash Flow 0 (230,000) 1 60,000 2 60,000 3 60,000 4 60,000 5 60,000 NPV = (13,713.43) Is this a good project for the business to accept? Explain why or why not. NPV= -13,713.43 This project would not be good for the business to accept because it will take more than five years for the business to receive their initial investment back. (2) Calculate the Net Present Value (NPV) of the following cash flow projections based on a required rate of 10.5%: Year Cash Flow 0 (120,000) 1 35,000 2 47,500 3 55,000 4 62,000 NPV = 32,925.4247651089 Is this a good project for the business to accept? Explain why or why not. NPV= 32,925.42 This would be a good project for the business to accept because the initial investment would be paid off by year 3. Also there will be a profit of 32,925.42 (3) A company needs to decide if it will move forward with two new products that it is evaluating. The two initiatives have the following cash flow projections: Project A Year Cash Flow 0 -800,000 1 220,000 2 265,000 3 292,000 4 317,000 Year Cash Flow 0 -650,000 1 175,000 2 175,000 3 175,000 4 175,000 NPV = 35,603.75 NPV= -11,271.3767785331 Project B 5 175,000 Based on the risk of each project, the company has a required rate of return of 11% for Project A and 11.5% for Project B. The company has a $1.5 million budget to spend on new projects for the year. Should the company move forward with one, both, or neither of the two new products? Show your work to support your answer. Project A NPV:35,603.75 Project B NPV:-11,271.38. therefore the company should move forward with project A. this is so since Project A it will yield a profit of 35,603.75 while Project B will not make the initial investment back in 5 year. (4) Calculate the internal rate of return (IRR) of the following cash flows: Year Cash Flow 0 (1,650,000) 1 330,000 2 365,000 3 380,000 4 415,000 5 6 405,000 370000 7 294,000 IRR 12% 12% (5) If a company has a required rate of return of 15%, should the following project be accepted based on these expected cash flows below? Year 0 1 2 3 4 5 6 Cash Flow (274,000) 68,000 73,000 76,500 78,000 82,500 77,000 IRR 16% Please explain why or why not the company should move forward with this endeavor. the project should be accepted since its IRR is 16 % i.e. greater than the required rate of return of 15% (6) Based on the investor expectations of earning at least 12%, should this projected below be completed? Year 0 1 2 3 4 5 6 Cash Flow (133,000) 37,000 42,750 44,000 46,500 82,500 77,000 Please explain why or why not the company should move forward with this endeavor. Yes, the project should be completed since it has an IRR of 29% i.e. There will be high return rate. IRR 29% ...
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Tutor Answer

shellyt
School: UC Berkeley

Attached.

1

MISALIGNED INCENTIVES

Financial Trends in the Healthcare Systems
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2

MISALIGNED INCENTIVES
Health care systems and hospitals are experiencing constant pressure to minimize costs,
maintain and improve a healthy labor force. There are arrays of financial and economic
challenges whereas healthcare becomes more consumer-centric. Stakeholders in the health care
sectors have tried to identify these challenges in order for them to come up with strategies to
solve them. They have been attempting to analyze the effect of engaging patients and employees
as key players in the issues. They identified vital topics such as healthcare striving to spur their
revenue growth amidst intense competition, the costs of recruiting and retaining physicians,
revenue cycle challenges. This raises the major issue of Misaligned Incentives in the HealthCare
System.
Economic trends of the healthcare payment System
According to the Centers for Medicare and Medicaid Services (CMS) 2016 report on
National Health Expenditures ,the overall health spending increased by 4.3% in 2016 due to the
5.8% increase in 2015 (Keehan,2016). Healthcare spending growth on expansion and significant
retail prescription recorded a decrease in 2016. The report indicates that slow growth spending
was due to the slow rate of payment by substantial payers such as Medicare, Medicaid, and
private health insurance. The slow growth might have also been caused by the slow growth in
services and goods categories such as clinical and physician services, hosp...

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Review

Anonymous
Tutor went the extra mile to help me with this essay. Citations were a bit shaky but I appreciated how well he handled APA styles and how ok he was to change them even though I didnt specify. Got a B+ which is believable and acceptable.

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