Exam 2 BA 620 Deadline: Dec 3, 2019 Prof: Name: Thomas Griffin 1. What is a financial option? What is the single most important characteristic of an option? ( 5 pts) A financial option is a contract which its holder the right to buy (or sell) an asset at a predetermined price within a specified period of time. An option’s most important characteristic is that it does not obligate its owner to take any action; it merely gives the owner the right to buy or sell an asset. 2. Consider Triple Play’s call option with a $25 strike price. The following table contains historical values for this option at different stock prices: Stock Price Call Option Price $25 $ 3.00 30 7.50 35 12.00 40 16.50 45 21.00 50 25.50 a) Create a table which shows (1) stock price, (2) strike price, (3) exercise value, (4) option price, and (5) the time value. (10 pts) Stock Price Strike Price Exercise value Call Option Time value 25 25 0 3 3 30 25 5 7.5 2.5 35 25 10 12 2 40 25 15 16.5 1.5 45 25 20 21 1 50 25 25 25.5 0.5 b) What happens to the option’s time value as the stock price rises? Why? (5 pts)  Options time value falls as the stock price increase because: 1. Time value is very important, because it erodes such that it disappears completely at option expiration. Thus, an option's worth at expiration is only the amount it is in the money. The more an option is in the money, the higher its value. 2. When the option is deep in the money the price difference is itself quite higher to outweigh time value of options. 3. Quinlan Enterprises stock trades for $52.50 per share. It is expected to pay a $2.50 dividend at year end (D1 = $2.50), and the dividend is expected to grow at a constant rate of 5.50% a year. The before-tax cost of debt is 7.50%, and the tax rate is 25%. The target capital structure consists of 45% debt and 55% common equity. a) What is the company's WACC if all the equity used is from reinvested earnings? (10 pts) b) What four common mistakes in estimating the WACC should be avoided? (10 pts) 4. Carolina Company is considering Projects S and L, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and are not repeatable. WACC: 7.75% Year 0 1 2 3 4 CFS −$1,050 $675 $650 CFL −$1,050 $360 $360 $360 $360 a) If the decision is made by choosing the project with the higher IRR, how much value will be forgone? (15 pts) $12.72 b) What is the underlying cause of ranking conflicts between NPV and IRR? (5 pts) 5. a) Distinguish among beta (or market) risk, within-firm (or corporate) risk, and stand-alone risk for a ...

1. Exam 2 BA 620
Deadline: Dec 3, 2019
Prof:
Name: Thomas Griffin
1. What is a financial option? What is the single most
important characteristic of an option? ( 5 pts)
A financial option is a contract which its holder the right to buy
(or sell) an asset at a predetermined price within a specified
period of time. An option’s most important characteristic is that
it does not obligate its owner to take any action; it merely gives
the owner the right to buy or sell an asset.
2. Consider Triple Play’s call option with a $25 strike price.
The following table contains historical values for this option at
different stock prices:
Stock Price
Call Option Price
$25 $ 3.00
30 7.50
35 12.00
40 16.50
45 21.00
50 25.50
a) Create a table which shows (1) stock price, (2) strike price,
(3) exercise value, (4) option price, and (5) the time value. (10
pts)
Stock Price
Strike Price
Exercise value
Call Option
Time value
25

2. 25
0
3
3
30
25
5
7.5
2.5
35
25
10
12
2
40
25
15
16.5
1.5
45
25
20
21
1
50
25
25
25.5
0.5
b) What happens to the option’s time value as the stock price
rises? Why? (5 pts)
Options time value falls as the stock price increase because:
1. Time value is very important, because it erodes such that it
disappears completely at option expiration. Thus, an option's

3. worth at expiration is only the amount it is in the money. The
more an option is in the money, the higher its value.
2. When the option is deep in the money the price difference is
itself quite higher to outweigh time value of options.
3. Quinlan Enterprises stock trades for $52.50 per share. It is
expected to pay a $2.50 dividend at year end (D1 = $2.50), and
the dividend is expected to grow at a constant rate of 5.50% a
year. The before-tax cost of debt is 7.50%, and the tax rate is
25%. The target capital structure consists of 45% debt and 55%
common equity.
a) What is the company's WACC if all the equity used is from
reinvested earnings? (10 pts)

4. b) What four common mistakes in estimating the WACC should
be avoided? (10 pts)
4. Carolina Company is considering Projects S and L, whose
cash flows are shown below. These projects are mutually
exclusive, equally risky, and are not repeatable.
WACC: 7.75%
Year 0 1 2 3 4
CFS −$1,050 $675 $650
CFL −$1,050 $360 $360 $360 $360
a) If the decision is made by choosing the project with the
higher IRR, how much value will be forgone? (15 pts)
$12.72
b) What is the underlying cause of ranking conflicts between
NPV and IRR? (5 pts)

5. 5. a) Distinguish among beta (or market) risk, within-firm (or
corporate) risk, and stand-alone risk for a project being
considered for inclusion in a firm’s capital budget. (10 pts)
Stand-alone risk is the project's risk if it is held as a lone asset.
It disregards the fact that it is but one asset within the firm's
portfolio of assets and the firm is but one stock in a typical
investor's portfolio of stocks. stand-alone risk is measured by
the variability of the project's expected return.
b) In theory, market risk should be the only “relevant” risk.
However, companies focus as much on stand-alone risk as on
market risk. What are the reasons for the focus on stand-alone
risk? (10 pts)
It is often difficult to quantify market risk, on the other hand,
we can usually get a good idea of a project's stand-alone risk,
and that risk is normally correlated with market risk: the higher
the stand-alone risk the higher the market risk is likely to be.
therefore, firms tent to focus on stand-alone risk, then deal with
corporate and market risk by making subjective, judgmental
modifications to the calculated stand-alone risk.
6. Century Roofing is thinking of opening a new warehouse,
and the key data are shown below. The company owns the
building that would be used, and it could sell it for $100,000
after taxes if it decides not to open the new warehouse. The
equipment for the project would be depreciated by the straight-
line method over the project's 3-year life, after which it would
be worth nothing and thus it would have a zero salvage value.
No new working capital would be required, and revenues and
other operating costs would be constant over the project's 3-

6. year life. What is the project's NPV? (Hint: Cash flows are
constant in Years 1-3.) (20 pts)
Project cost of capital (r)
10.0%
Opportunity cost
$100,000
Net equipment cost (depreciable basis)
$65,000
Straight-line deprec. rate for equipment
33.333%
Sales revenues, each year
$123,000
Operating costs (excl. deprec.), each year
$25,000
Tax rate
25%
SECTION E: IMPLEMENTATION PLAN2
SECTION E: IMPLEMENTATION PLAN5
Implementation Plan
Jessica D. Brossack
Grand Canyon University: HCA-699
November 25, 2019
SECTION E: IMPLEMENTATION PLAN1
Implementation Plan
Stakeholders of the healthcare system will be the potential
subjects in the implementation plan. The consent of

7. management must be sought out to give an approval for what
needs to be done. This calls for a good representation of the
grievances of the healthcare officers to the concerned offices
(Todaro-Franceschi, 2019). The channels to be followed must
be conscious of the pleas of healthcare workers. All
departments ranging from finance, and counseling to customer
representatives must be involved in the whole agenda. Their
role is to ensure their input towards the idea is put into
consideration before implementation. There is no need for
consent forms because management is aware of the issue.
A notice of six months is necessary to give management time to
look into the issue(s). This is based on the working policy of
many healthcare organizations that guide their professional
environment. They are supposed to register their issues to
management to make sure it is looked into in detail. The
importance of this is to make sure they are given a workable
time frame for adequate consideration and research before
implementation. Consultations of the whole issue also take
place during this time plan due to the high financial investment
and technical input needed. This calls for patience from the
healthcare worker(s) despite having their issue submitted for
consideration.
The process need the intervention of the human resources
department within the organization. This is necessary, as they
are the ones who act on behalf of management and are supposed
to keep the employee’s best interests at the forefront. They
must communicate the concerns of the healthcare workers to the
necessary offices, as well as making the employees aware of
their value within the organization. The purchase of the clinical
tools needed for the electronic health equipment would also
need large financial investments. The implication of this is the
fact that the process is going to be quite expensive, hence
costing the organization (Lien, & Jiang, 2017). They would
need technical experts to install the online system, the
maintenance resources, as well as consultancy fees for making
the system permanently work.

8. The methods and instruments for monitoring the performance of
the system will be a questionnaire in this case. This is because
there is a need for feedback from different stakeholders on how
the system is serving people. The response of the concerned
people will be used as the guiding mechanism of whether to
continue with the system or not. The people answering the
questions are encouraged to be as honest as possible in order to
give the most accurate network. This implies that there is a
need for sensitization of people to convince management to
implement the solution as soon as possible.
The process of intervening in the solution will depend on the
response of management. The proposal to make the system
work will have to be accepted since the welfare of the
healthcare worker(s) is a large priority. Since they are the ones
having issues, they will have to undergo some short training on
how to use the new systems. The electronic system where the
patient data will be kept will help the healthcare worker(s) to
have a reduced interaction with patients, which is a contributing
factor towards their burnout (Fong, 2016). Healthcare workers
will need to be taught how to efficiently use the system to the
benefits of their organization, and themselves, in the end.
The departmental head will manage the data collection plan.
This will be managed from the main server under the guidance
of the Chief Information Officer (CIO). The healthcare officers
in charge will keep the other staff informed of their
performance based on the analyzed data. They will be sending
individual results to staff to show them how efficient they are in
the new system. The data interpretation process from the
servers provided by the CIO will be given to the individual
healthcare officers to rate their performance. They will have
developed healthcare systems that make interpretation and
analysis of the data easier.
This implementation plan is feasible in the healthcare setting.
Cost
Item
Personnel

9. $500
Consumable Supplies
$263
Equipment
$510
Computer-Related Costs
$365
Other costs (travel, presentation, development)
$95
Total Cost
$1733
The personnel cost will be used to make sure technical support
people are compensated for their service(s). The consumables
supplies will be the cost incurred to make sure the welfare of
the staff will be taken care of. The computer-related costs will
include installation, maintenance, and repairs. Other related
costs of travel and development are inevitable in the
organization. There are plans to revise the contents of the
implemented plan to ensure the welfare of the staff is given
maximum attention.
References
Fong, C.M. (2016). Role overload, social support, and burnout
among nursing educators.
Journal of Nursing Education, 29(3), 102-108.
Lien, A.S.Y., & Jiang, Y.D. (2017). Integration of diffusion of
innovation theory in diabetes

10. care. Journal of Diabetes Investigation, 8(3), 259.
Todaro-Franceschi, V. (2019). Compassion fatigue and burnout
in nursing. Enhancing
professional quality of life. Springer Publishing Company.
SECTION B: LITERATURE SUPPORT2
SECTION B: LITERATURE SUPPORT4
Literature Support
Jessica D. Brossack
Grand Canyon University: HCA-699
November 13, 2019
SECTION B: LITERATURE SUPPORT1
Section B: Literature Support
Literature Support
Providing valid, applicable and relevant research to support
evidence-based practice implementation or improvement in
healthcare is a vital aspect in providing quality healthcare to
both patients and healthcare practioners.
Description of Search Method(s)
In conducting my research to support my thesis of Healthcare
Burnout, I started by refining my search to Google Scholar and
searching through peer-reviewed articles. I then filtered my
range further by only allowing articles that have been published
in the last 10 years. While technology, especially in healthcare,
can rapidly become obsolete with constant updates and

11. upgrades, the behaviors of a person do not change as rapidly.
This is how I determined that a 10-year publication span was
would provide the most relevant information.
Once these criteria were established, I entered different
combinations of search terms including ‘burnout’, ‘healthcare
burnout’, ‘burnout intervention’, ‘preventing burnout in
healthcare’, ‘burnout and patient safety’, and various
combinations of those words along with each other. Once I
found articles that I thought would be relevant from those
searches, which I determined by scanning the abstract (if
provided) and skimming through the headings and paragraphs of
the papers, I book-marked each one to save for future, in-depth
study.
Of those book-marked, I then had to make concessions for those
articles that were only available for certain societies or
subscriptions or were only available for a fee versus those that
were available in the public domain, free of charge. I then had
to determine if an article that was free would be as good as an
article that may have cost upwards of $200.00 for a
downloadable, printable copy. A few of the articles that
required a membership or purchase to access I was able to input
in to the Grand Canyon online student library and find there
under the academic access rights.
Exclusions from my search criteria included anything published
prior to 2009, any article or study that did not state that it was
peer reviewed, or any article that did not fit my particular
search criteria, or that I felt I had already gathered enough
information on that portion of the research. At this point, I
have found 3 articles that I feel will sufficiently outline what
are believed to be the best interventions of healthcare burnout.
Summarization of Research
The first article I chose to include as a solution to healthcare
burnout presents an overall discussion on the notion of burnout
itself and how it relates to nurses, and whether any steps are
being taken to combat that burnout. I believe it is an important
article as it presents the issue as well as gives background on

12. what exactly healthcare burnout is as it relates to the nursing
profession, in this case, specifically in the field of oncology
nursing (Henry, 2013). Oncology nursing is often a very
difficult and emotionally draining profession as these nurses are
often caring for patients that suffer “physical, emotional,
spiritual, and existential suffering…and often leads to
compassion fatigue” (McSteen, 2010). Compassion fatigue is
term that in my research I have found to be almost
interchangeable with burnout, and “occurs when caregivers
unconsciously absorb the distress, anxiety, fears, and trauma of
the patient” (Henry, 2013).
After giving a thorough description of compassion fatigue and
healthcare burnout, Henry goes on to offer such interventions as
employee assistance programs (EAP’s), help in the form of
counseling with a psychologist, psychiatrist, or counsel with
their particular religious representative or finally a support
group. Henry cited this information based on a study
conducted by Aycock and Boyle (2009) who examined existing
management interventions. The study surveyed “231 Oncology
Nursing Society chapter presidents with 103 responding”
(Henry, 2013).
My second article is titled The Inevitability of Physician
Burnout: Implications for Interventions by Anthony
Montgomery. Here, Montgomery again discusses the problem
healthcare workers experiencing burnout presents to the
profession and further states that he feels “there is a disconnect
between performance and physician health” (Montgomery,
2014). Here, Montgomery states that healthcare burnout is
typically focused on “the individual physician with little
attention given to the organizational and social context within
which the physician is practicing” (Montgomery, 2014), and
further states that a balanced work/life ratio would assist in
alleviating the stresses of burnout and fatigue.
Finally, I reviewed an article titled Effectiveness of an
Intervention for Prevention and Treatment of Burnout in
Primary Health Care Professionals. Again, the authors open

13. with the dangers of healthcare burnout as it relates to patient
care and caregiver ennui in providing quality care. They then
report their findings on a study they conducted with different
forms of intervention and the resulting data of those studies
(Gomez-Gascon, et.al, 2013).
Validity
All three articles were written and submitted by authors for peer
review to legitimate and certified entities after thorough review
before publication. They were then pulled by myself from those
peer-reviewed sources for their accuracy of information to my
particular research topic and reviewed for applicability of that
information.
References
Gomez-Gascon, T., Martin-Fernandez, J., Galvez-Herrer, M.,
Tapias-Merino, E., Beamud-
Lagos, M., & Mingote-Adan, J. C. (2013). Effectiveness of an
intervention for prevention
and treatment of burnout in primary health care professionals.
Retrieved November 13,
2019, from https://link.springer.com/content/pdf/10.1186/1471-
2296-14-173.pdf.
Henry, B. J. (2013, July 27). Nursing Burnout Interventions:
What is Being Done? Retrieved
November 13, 2019, from https://eds-a-ebscohost-
com.lopes.idm.oclc.org/eds/pdfviewer/pdfviewer?vid=4&[email
protected]
McSteen, K. L. (2019, January 5). Compassion fatigue in

14. oncology nursing: A witness to
suffering. Retrieved November 13, 2019, from
https://www.oncologynurseadvisor.com/home/departments/ce-
courses/compassion-fatigue-in-oncology-nursing-a-witness-to-
suffering/.
Montgomery, A. (2014, April 19). The inevitability of physician
burnout: Implications for
interventions. Retrieved November 13, 2019, from
https://www.sciencedirect.com/science/article/pii/S2213058614
000084.
SECTION C: SOLUTION DESCRIPTION2
SECTION C: SOLUTION DESCRIPTION3
Solution
Description
Jessica D. Brossack
Grand Canyon University: HCA-699

15. November 18, 2019
SECTION C: SOLUTION DESCRIPTION1