Acquiring a supplier because it becomes more profitable
a. will raise the asking price to offset any increase in cash flow over time
b. will increase your profits
c. will decrease your profits
d. will make you alter operations
QUESTION 2The most important source of funding for Medicare is
a. the federal income tax.
b. premiums paid by elders and deducted from their monthly Social Security checks.
c. a 2.9 percent payroll tax paid by all workers, regardless of their age.
d. proceeds from the Medicare Trust Fund.
e. a tax on the health insurance premiums pay by all group plans.
QUESTION 3Continuing with the same family from the preceding question, suppose a risk neutral insurance company exists to provide vacation insurance. Suppose further that each vacation day requires a constant expenditure, and this expenditure is standard across everybody. This allows us to simplify the problem by considering all payments to be in terms of vacation days. What is the least the insurance company would charge (in terms of vacation days)?
a. 3
b. 4
c. 5
d. 6
QUESTION 4A requirement for acquiring a related firm to generate value is
a. it be profitable
b. you be profitable
c. y ou will alter operations because of the acquisition
d. all synergies between the firms were exploited before the acquisition
QUESTION 5Physicians who accept assignment on their Medicare patients
a. bill patients for 80 percent of the allowable fee.
b. agree to forego balance billing.
c. accept the allowable fee for all services.
d. agree to charge private insurance patients the same fees as Medicare patients.
e. Both b and c.
QUESTION 6Continuing with the same family from the preceding question, what is the greatest (integer) number of vacation days the family would be willing to give up in order to guarantee a healthy vacation?
a. 3
b. 4
c. 5
d. 6
QUESTION 7If your supplier becomes more profitable
a. you become more profitable by acquiring it
b. you become less profitable by acquiring it
c. acquiring it will make you more profitable if there are no synergies to exploit
d. unless there are no synergies to exploit through acquisition, acquiring it will not make you more profitable
QUESTION 8Possibly, the most serious flaw in the Medicare system is the fact that
a. the deductible is too high for most elders to afford.
b. it provides no real protection against catastrophic losses resulting from unusually long hospital stays.
c. the definition of an episode of illness can lead to patients paying the deductible more than once during the calendar year.
d. coverage for outpatient drugs is poor.
e. elders are required to pay monthly premiums to participate in Part B.
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