The Break-Even Equation and Profit Calculation Submit written responses to these questions. 1.What are the formulas for: ◦The basis break-even equation ◦The basis breakeven equation expanded to include indirect costs and desired profit? 2.Explain the relationship between step-five costs and the relevant range. 3.Based on the product margin, when is it in the best interests of an organization to continue or drop a service? 4.Laurie Vaden is a nurse practitioner with her own practice. She has developed contracts with several large employers to perform routine physical, fitness for duty exams, and initial screening of on-the-job injuries. She currently sees 150 per month, charging 450 per visit. Her total costs are $7,500, of which $1,500 is for supplies. She has decided that she needs to increase profit, so she is considering raising her fee to $65. She expects to lose 10 percent of her business to competitors that charge an average of 460 per visit. Determine her current and predicted: 1) revenues, 2) variable costs, and 3) total contribution margin. What do you recommend she do? Why? 5.Janet Gilbert is director of labs. She has some extra capacity and has contracted with some small neighboring hospitals to run some of their lab tests. She has recently had a study conducted and has determined that her costs of these contracts are $10,000 of which $7,000 are for supplies and items related to each test. She currently charges an average of $10,00 per lab test. She is thinking of lowering her price by 20 percent in hopes of raising her current volume of 10,000 tests by 15 percent. Determine her current and predicted: 1) revenues, 2) variable costs, 3) total contribution margin, and 4) net income. What do you recommend she do? Why? 6.Shady Rest Nursing Home has 100 private pay residents. The administrator is concerned about balancing the ratio its private pay to non-private pay patients. Non-private pay sources reimburse an average of $100 per day whereas private pay residents pay average 100 percent of full daily charges. The administrator estimates that variable cost per resident per day is $25 for supplies, food, and contracted services and annual fixed costs are $4,562,500. ◦What is the daily contribution margin of each non-private pay resident? ◦If 25 percent of the residents are non-private pay, what will shady Rest charge the private pay patients in order to break even? ◦What if non-private pay payors cover 50 percent of the residents? 7.The owner of Shady Rest Nursing Home insists that the facility earn $80,000 in annual profits. How much must the administrator raise the per day charge for the privately insured residents if 25 percent of the residents are covered by non-private pay payors? Short essay 3: The Internet is a Dangerous Place The Wave of Ransomware Attacks Introduction Ransomware is fetal software that encrypts or removes access to computer files until a ransom payment is made. Ransomware has been around since 1989, but ...

1. The Break-Even Equation and Profit Calculation
Submit written responses to these questions.
1.What are the formulas for: ◦The basis break-even equation
◦The basis breakeven equation expanded to include indirect
costs and desired profit?
2.Explain the relationship between step-five costs and the
relevant range.
3.Based on the product margin, when is it in the best interests
of an organization to continue or drop a service?
4.Laurie Vaden is a nurse practitioner with her own practice.
She has developed contracts with several large employers to
perform routine physical, fitness for duty exams, and initial
screening of on-the-job injuries. She currently sees 150 per
month, charging 450 per visit. Her total costs are $7,500, of
which $1,500 is for supplies. She has decided that she needs to
increase profit, so she is considering raising her fee to $65. She
expects to lose 10 percent of her business to competitors that
charge an average of 460 per visit. Determine her current and
predicted: 1) revenues, 2) variable costs, and 3) total
contribution margin. What do you recommend she do? Why?
5.Janet Gilbert is director of labs. She has some extra capacity
and has contracted with some small neighboring hospitals to run
some of their lab tests. She has recently had a study conducted
and has determined that her costs of these contracts are $10,000
of which $7,000 are for supplies and items related to each test.
She currently charges an average of $10,00 per lab test. She is
thinking of lowering her price by 20 percent in hopes of raising
her current volume of 10,000 tests by 15 percent. Determine her
current and predicted: 1) revenues, 2) variable costs, 3) total
contribution margin, and 4) net income. What do you
recommend she do? Why?
6.Shady Rest Nursing Home has 100 private pay residents. The

2. administrator is concerned about balancing the ratio its private
pay to non-private pay patients. Non-private pay sources
reimburse an average of $100 per day whereas private pay
residents pay average 100 percent of full daily charges. The
administrator estimates that variable cost per resident per day is
$25 for supplies, food, and contracted services and annual fixed
costs are $4,562,500. ◦What is the daily contribution margin of
each non-private pay resident?
◦If 25 percent of the residents are non-private pay, what will
shady Rest charge the private pay patients in order to break
even?
◦What if non-private pay payors cover 50 percent of the
residents?
7.The owner of Shady Rest Nursing Home insists that the
facility earn $80,000 in annual profits. How much must the
administrator raise the per day charge for the privately insured
residents if 25 percent of the residents are covered by non-
private pay payors?
Short essay 3: The Internet is a Dangerous Place
The Wave of Ransomware Attacks
Introduction
Ransomware is fetal software that encrypts or removes
access to computer files until a ransom payment is made.
Ransomware has been around since 1989, but has multiplied
over the past few years due to it’s widespread success
(Protects). Countries around the world, including the U.S., have
experienced this type of unconventional cyber attack. A new
trend in ransomware attacks have transformed into targeting
hospitals. About 60% of hospitals in the U.S. were targeted by
ransomware attacks from 2015-2016 and the costs of these
rasomware attacks are growing exponentially (Radke).

3. Ransomware strategically locks the computer system to prevent
healthcare facilities from accessing data until ransom is paid,
usually in Bitcoin. It is essential for hospitals across the U.S. to
reevaluate their cyber security strategies to protect themselves
from ransomware attacks.
How Ransomware Operates
Malware is extremely powerful and calculated software. A
user does not have to be present at the time of infection as
computers can become infected without being touched. The only
thing a hacker needs to infect a computer is for the computer to
be on and on the network (Chapell). It is simple for a hacker to
use an encryption vector specifically against health care
facilities and shut down their operations (Fox-Brewster). The
infection of a computer happens in one of two ways: by clicking
on a link or attachment in an email or by an exploit kit released
by a compromised website. Hackers use encryption and other
techniques to get their software to slip past antivirus security
undetected. A hacker could have access to a network for
months or even years without the users knowledge and could
deploy ransomware at any time (Radke). Ransomware is
different from other viruses because it alerts users of it presence
as part of it routine (Protects). Ransomware encrypts nearly all
types of files on hard drives and their shared networks,
including MS Office files, PDFs, documents, pictures and
videos (Radke). Once the encryption stage is complete, a lock
screen is displayed informing the user that they have a limited
time period to pay a ransom, usually in the form of Bitcoin. To
restore access the user must pay the ransom in exchange for a
decryption key. If the ransom isn’t paid by the deadline, the
price will go up for the files or the files will be destroyed.
Infection of a single computer can compromise the entire
network (Fox-Brewster). Digital extortion leaves organizations
with two options, decide if they can live without the encrypted
data or pay the ransom.

4. The Beginning of Widespread Ransomware Attacks
Widespread Ransomware attacks began when the National
Security Agency’s (NSA) cyber weapon WannaCry ransomware,
a powerful hacking tool, was stolen from the NSA in 2016. A
linked team of hackers known as the Shadow Brokers stole the
Windows hacking tool. The hacking tool infected users of
Windows Systems, which included many hospitals around the
world including the U.S. (Fox-Brewster). This tool created by
the NSA has created unexpected damage and done more harm
than good. Analysis of ransomware discovered that multiple
techniques are used to spread the virus. One of the techniques
was addressed by a security update previously provided for all
platforms of Windows XP to Windows 10. The Shadow Brokers
figured out a way to take advantage of the vulnerability in the
Windows operating system, which is how the WannaCry
ransomware attack was able to spread. After the attack,
Microsoft advised users to use caution when opening files in
emails from unknown sources, which is how malware is usually
spread (Glaser). WannaCry has proved that there is vulnerable
infrastructure capable of being hacked if systems aren’t
safeguarded.
U.S. Hospitals Affected by Ransomware
Hospitals hold sensitive customer data that needs to be
protected to ensure effective service and consumer privacy,
making them ideal targets for hackers. If healthcare providers
lose control of patient information, they may be unable to
deliver treatment when needed. There are also strict legal
requirements governing the protection of patient data. Both
cases make hospitals subject to lawsuits that could cost far more
than what they would have to pay in ransom (Yates). In
February of 2016, Hollywood Presbyterian Medical Center,
located in Southern California was hit with a ransomware
attack. The hackers demanded ransom for $17,000, which was
one of the largest ransoms ever paid as result of a ransomware
attack (Protects). Hollywood Presbyterian experienced over a

5. week of downtime and disruption to their services due to the
attack. The attack affected all areas critical for keeping the
hospital up and running. Hollywood Presbyterian suffered
estimated losses of over $100,000 per day from disruption to CT
scans alone (Protects). Similarly in May of 2016, Kansas Heart
Hospital, in Wichita, KS, became infected with ransomware and
lost access to their files. The hospital paid the ransom but
received access to only some of its files. The attacker then
demanded more money before allowing the hospital to access
more of its files. Kansas Heart Hospital declined to pay any
more in ransom (Radke). Hospitals have critical information and
money to pay, making them easy targets.
Ransomware’s Impact on Hospitals
Administrative PC’s aren’t the only computers hacked during a
ransomware attack on hospitals, medical devices themselves are
affected to. When a hospitals network is compromised, it has
the potential to affect other Windows based devices connected
to that network. The impacts ransomware attacks have on
hospitals are detrimental to a hospital’s performances and
patient lives. These attacks can cause medical device outages,
which will lead to a delay in patient care, trigger more clinical
mistakes, and lead to an increase in resource needs (Fox-
Brewster). Many of the bigger machines in hospitals such as x-
ray, CAT Scan, and MRI machines run the Windows operating
system. Hackers preventing these machines from being used and
encrypting their information aren’t just canceling operations
and turning patients away, they have the potential to negatively
affect life and death situations. Ransomware locks medical staff
out of patient’s records until ransom money is paid up, and even
then it is not guaranteed that all the files will be unlocked. It is
difficult for doctors and nurses to treat patients without their
digital records or prescription dosages. The loss of patient
records can result in critical services being halted and
communication being suspended. Software affected by
ransomware attacks could potentially cause millions of peoples

6. data to be exposed (Protects). It is vital for hospitals to work
with their IT security teams to improve security software so
they wont have to pay the price of ransomware attacks.
Ransomware and it’s Cost to U.S. Hospitals
Due to success several high profile attacks have had on
hospitals, criminals are increasingly targeting healthcare
providers. Digital extortion is becoming more popular because
Ransomware cuts out the digital middlemen. Rather than
collecting credit card details that will need to be sold on the
dark web for lesser money, ransomware demands money directly
from healthcare providers for higher prices (Yates). In order to
calculate the true cost of ransomware, the cost of downtime due
to an attack has to be taken into account. Some ransomware
attacks have left entire hospitals shutdown for days,
outweighing the cost of the ransom itself. Unplanned downtime
at hospitals costs on average, $7,900 a minute per incident and
it takes physicians double time to perform administrator tasks
manually when their systems are down (Protects). Hospitals are
prime targets because they need up-to-date information from
patient records and often would rather pay a ransom than risk
delayed patient care that could result in lawsuits (Radke). In
order for hospitals to avoid a ransomware attack, they need to
make frequent backups, get good antivirus protection, and train
their employees on security awareness.
Preventing Ransomware Attacks
Cyber security firms and IT professionals are scrambling to find
ways to prevent future ransomware attacks on major companies,
organizations and hospitals globally. Hackers are constantly
developing different types of ransomware variants that avoid
detection by staying a step ahead of traditional security
software. In 2015, there were 362,000 new crypto-ransomware
variants spotted. That is an average of almost one thousand new
variants everyday, making it incredibly difficult for antivirus to
keep up with changing ransomware tactics (Protects). Ninety

7. three percent of phishing emails are delivering ransomware
because they attack a mass market, are low cost, and fully
automated (Protects). Unless hospitals have taken preventative
measures and invested in effective backup strategies, their
options are going to be extremely limited (Zetter). Each
variation of ransomware works differently, and hospitals must
be able to respond to new threats as rapidly and effectively as
possible by having technologies in place to recognize already-
used variations (Radke). FBI recommends that organizations not
pay ransoms, because attackers will not always give you the key
to decrypt your files. Also, paying the ransom simply leads to
more ransomware attacks (Radke). The best way for hospitals
to prevent ransom ware attacks is by restricting permissions to
areas of the network. Instead of having thousands of people
accessing files on a single server, they need to break the
network into smaller groups. This way, if a server gets infected,
it won’t spread ransomware to everyone on the network. This
forces attackers to work harder to locate and lock down more
servers (Zetter). If hospitals are able to turn their network into a
hard target to hack, these ransomware attackers will have to
work harder to hack their system.

8. Works Cited
Chappell, Bill, and Maggie Penman. “Ransomware Attacks
Ravage Computer Networks In Dozens Of Countries.” NPR,
NPR, 12 May 2017, www.npr.org/sections/thetwo-
way/2017/05/12/528119808/large-cyber-attack-hits-englands-
nhs-hospital-system-ransoms-demanded.
Fox-Brewster, Thomas. “Medical Devices Hit By Ransomware
For The First Time In US Hospitals.” Forbes, Forbes Magazine,
18 May 2017,
www.forbes.com/sites/thomasbrewster/2017/05/17/wannacry-
ransomware-hit-real-medical-devices/#241febfb425c.
Glaser, April. “U.S. Hospitals Have Been Hit by the Global
Ransomware Attack.” Recode, Recode, 27 June 2017,
www.recode.net/2017/6/27/15881666/global-eu-cyber-attack-us-
hackers-nsa-hospitals.
Protects, Inc Barkly. “Ransomware ProtectionA Guide to
Ransomware for Hospitals and Healthcare
Providers.” Ransomware for Hospitals and Healthcare
Providers: A Guide | Barkly, www.barkly.com/hospital-
ransomware-healthcare.
Radke, Bruce A., et al. “Ransomware Rises Among
Hospitals.” VedderPrice, Vader Thinking | Articles, July 2016,
www.vedderprice.com/ransomware-rises-among-hospitals.
Yates, Mark. “The Cost of Ransomware.” AVG, 9 May 2016,
www.avg.com/en/signal/the-cost-of-ransomware.
Zetter, Kim. “Why Hospitals Are the Perfect Targets for
Ransomware.” Wired, Conde Nast, 3 June 2017,
www.wired.com/2016/03/ransomware-why-hospitals-are-the-
perfect-targets/.

9. Essays and Papers: What is a Peer Review?
CSCI 3316 Fall 2017
1 Goals
This course is a “W” course. That means you will be learning
about writing, editing, and rewriting,
as well as about technology and ethics. Writing will help you
learn the course content. Learning
about both writing and ethics will happen when you read
another student’s work. This handout
describes what I expect you to do in your role as a peer-
reviewer for another student’s paper.
Students will be organized into pairs for each assignment. You
will receive your partner’s paper
in the email the day the first draft is due. Please print it out so
that you can write on the printed
copy. As you read the paper, mark anything you find that can be
improved. Following is a list of
things to look for.
1. Unclear passages. This is probably the most important kind
of help you can give your
partner. Identify passages that are confusing and mark them
with yellow highlighter. Do this
when the sentence is tangled and you do not understand what
the writer intended to say. Mark
a sentence that you cannot follow because it has too many

10. clauses or murky pronouns. Mark a
sentence if you need to read it three times to understand it.
2. Wrong choice of words. Circle a word or phrase if you think
the writer used the wrong word.
Do so even if you are unsure. Circle a word if it does not belong
in a professional communication.
Write WW
3. Unsupported claims. In our field, it is very important to be
able to support your claims
and opinions. Write UC in the margin opposite an unsupported
claim. Write BL if you believe
the writer is using bad logic or that the conclusion does not
follow from the evidence.
4. Hedges. A writer should not hedge his statements. For
example, a sentence should not start
with “I think that sometimes the answer is probably ... ”.
Without the hedging, this sentence
becomes: “Probably, ...”, or “Sometimes, ...”. Draw a line
through any hedges that you find.
5. Conciseness. Good writing is concise. Every word in the
sentence should contribute to the
meaning. Pretend you have to pay a fee for each word you write
– do not use three words where
one will do the job. For example, “Due to the fact . . . ” should
be replaced by ”Because. . . ” and
“really unique” should be, simply “unique”. Draw a line through
pads that you find. For example,
this sentence contains two pads: “You should circle a word if
you think the spelling is wrong.” Here
it is without the padding: “ Circle a word if the spelling is
wrong”.

11. 6. Other kinds of errors. For these kinds of errors, circle the
word or phrase and write an
error code in the margin. I do not expect you to be expert at
finding these errors. However, if you
see something, say something.
• For incorrect spelling, write SP.
• If the subject and verb do not agree, (plural/singular) write
SVA for subject/verb agreement.
• For a punctuation problem, write PN
• If the paragraph should be split into two paragraphs, write PR
near the split-point.
Essays and Papers: What is a Peer Review? CSCI 3316 Fall
2017 2
Finishing the review. Write a sentence or two about your
general impressions of the paper.
Say something you liked about the paper. Is it interesting?
convincing? Did you learn something
by reading it? Then state any criticisms. Is one part confusing?
Does some part seem mixed up
or wrong? How might the writer address that problem? Did the
writer fail to supply evidence for
a claim? Which one? What kind of evidence would help?
The avenues available for for-profit healthcare providers to
increase their equity position would be to increase the operation
and non-operation incomes, issue stock, and to create
partnerships. For non-profit health care providers, internally
generated funds, philanthropy, and government grants would be
the best ways to increases their equity.
The advantages for a taxpaying entity in issuing debt as

12. opposed to equity is that debt does not dilute ownership
interest, it is better for short-term financing, interest on debt
can be deducted for tax purposes (Coplan, 2009). Other
advantages are that there is less complication when there are
funds raised through debt there are fewer laws and regulations
that must be complied. There are future obligations of principle
and interest payments. The disadvantages are companies with
high debt see that it is difficult to serve the cost of debt. Debt
has a fixed obligation that must be paid at some point, there are
greater restrictions on a company regarding debt financing
through alternate sources, companies with high debt and equity
ratio are riskier, and interest repayment is a fixed obligation
which must be paid even if the company does not earn adequate
profits (Coplan, 2009).
Subordinated debentures are unsecured bonds that make
them minor to all present and future debt in the event of default,
liquidation, reorganization, and bankruptcy. It is debt that is
ranked after all other debts, has a lower priority than other
bonds, is repayable after other debts have been paid, are riskier
compared to other types of debts, have a higher rate of return,
and have a lower credit rating than senior bonds. Debenture is
an unsecured loan certificate issued by a company and backed
by a general credit rather than by specified assets. It is a
medium to long-term debt format used by large companies to
borrow money at a fixed-rate.
4. Why would an investment banker syndicate a bond issue with
other investment bankers?
5. If a $1,000 zero coupon bond with a 20-year maturity has a
market price of $311.80, what is its rate of return?
6. A tax-exempt bond was recently issued at an annual 8 percent
coupon rate and matures 20 years from today. The par value of
the bond is $1,000.
7. If a required market rates are 8 percent, what is the market
price of the bond?
8. If required market rates fall to 5 percent, what is the market
price of the bond?

13. 9. Charles City Hospital plans on issuing a tax-exempt bond at
the bond is $1,000.
10. If required market rates are 6 percent, what is the value of
the bond?
11. If required market rates fall to 12 percent what is the value
of the bond?
12. At what required market rate (3,6, or 12 percent) does the
above bond sell at a discount? At a premium?
13. Mercy Medical Mega Center , a taxpaying entity, has made
the decision to purchase a new laser surgical device. The device
costs $400,000 and will be depreciated on straight-line basis
over five years to a zero salvage value. Mercy Medical could
borrow the full amount at a 15 percent rate for five years. The
after-tax cost of debt equals 9 percent. Alternatively, it could
lease the device for five years. The before-tax lease payments
per year would be $80,000. The tax rate for this MegaCenter is
40 percent. From a financial perspective, should Mercy lease
the surgical device or borrow the money to purchase it and
why?
References
Coplan, J. (2009). Raising Capital: Equity vs. Debt. Retrieved
from Bloomberg:
https://www.bloomberg.com/news/articles/2009-12-04/raising-
capital-equity-vs-dot-debt