AHM-520 Exam Dumps : Health Plan Finance and Risk Management

Coral's equity holders have an ownership interest in the health plan

The interest that Coral pays on its debt most likely is not tax deductible to Coral

Coral's debt holders have no legal claim to Coral's assets

Equity is a more risky source of capital, from Coral's perspective, than is debt

favorable for both expenses and revenues

favorable for expenses, but unfavorable for revenues

favorable for revenues, but unfavorable for expenses

unfavorable for both expenses and revenues

When analyzing budget variances, a health plan's management should pay attention to unfavorable variances only.

A health plan can reduce the problem of unattainable goals by involving responsibility managers in the preparation of their centers' budgets.

One reason that a health plan would use cost-based transfer prices to evaluate the performance of its profit centers and investment centers is because, under this method of setting transfer prices, the selling center has maximum incentive to operate effectively and control costs.

In responsibility accounting, all employees who have any influence over a health plan's department are held equally accountable for the operations and financial outcomes of that department.