1. Many changes continue to occur in the healthcare industry. Because of increased competition for patients among providers and the need to determine how providers can better serve their clientele, hospital administrators sometimes administer a quality satisfaction survey to their patient after the patient is released. The following types of questions are asked on the satisfaction survey. What is the level of data measurement for these questions? (5) 1. How long ago were you released from the hospital? 2. Which type of unit were you in for most of your stay? __ Coronary Unit __Intensive Care __Maternity Care __Medical Unit __Pediatrics/ children Unit __Surgical Unit 3. In choosing a hospital, how important was the hospital location? (circle one) Very Somewhat Not Very Not at all Important Important Important Important 4. How serious was your condition when you were first admitted to the hospital? __Critical __Serious __Moderate __Minor 5. Rate your doctor: __Excellent __Very good __good __Fair __Poor 2. Which of these types of sampling is used: random, systematic, convenience, stratified, or cluster?(3) a. Exit Polls: On the day of the last presidential election, ABC News organized an exit poll in which specific polling stations were randomly selected and all voters were surveyed as they left the premises. b. Wine Tasting: The author once observed professional wine tasters working at the Consumer Solution convenience,convenience,systematic, stratified, stratified.

1. 1. Mark Barton owns a garage and is contemplating purchasing a tire retreading machine for
$26,000. After estimating costs and revenues, Mark projects a net cash flow from the retreading
machine of $4,400 annually for 8 years. Mark hopes to earn a return of 8 percent on such
investments.
What is the present value of the retreading operation?
2. Patty Schleis invests $13,567.65 now for a series of $3,300 annual returns beginning one year
from now. Patty will earn a return of 12% on the initial investment.
How many annual payments of $3,300 will Patty receive?
3. If Colleen Mooney invests $2,872.68 now and she will receive $12,000 at the end of 15 years,
what annual rate of interest will Colleen earn on her investment?
4. Joanne Quick made an investment of $22,734.91. From this investment, she will receive
$3,700 annually for the next 10 years starting one year from now. What rate of interest will
Joanne’s investment be earning for her?
5. Arthur Company is considering investing in an annuity contract that will return $31,200
annually at the end of each year for 20 years. What amount should Arthur Company pay for this
investment if it earns a 11% return
Solution
Answer To Question 1
Cash Outflow = 26000
Cash Inflow = 4400 for 8 years
Rate of Return = 8%
Present Value of Cash Inflows = 4400 * PVIFA (8 year, 8%)
= 4400 * 5.7466 = $25285.04
Net Present value of Operation = 25285.04 – 26000 = $- 714.96
Answer To Question 2
Present Value of Investment = 13567.65
Interest = 12% ; Annual Cash Flow = 3300
We know that Cash Flow * PVIFA (n years, 12%) = 13567.65
So, PVIFA (n years, 12%) = 13567.65 / 3300 = 4.1141
From the PVIFA table, 4.1141 can be found when I=12% and n =6 years
Hence Patty will receive 6 cash flows
Answer To Question 3
Present Value of Investment = 2872.68

2. N = 15 years and Future Value = 12000
(1 + i/100)^15 = 12000/2872.68
(1 + i/100)^15 = 4.17728
Or (1 + i/100) = 4.17728^ (1/15)
Or (1 + i/100) = 1.1
Or I = 0.1 = 10% Hence interest rate is 10%
Answer To Question 4
Present Value of Investment = 22734.91
Annual Cash Flow = 3700 for 10 years
We know that Cash Flow * PVIFA (10 years, i%) = 22734.91
So, PVIFA (10 years, i%) = 22734.91 / 3700 = 6.14457
From the PVIFA table, 6.14457 can be found when I=10% and n = 10 years
Hence interest rate is 10%
Answer To Question 5
Annual Cash Flows = 31200
N = 20 years ; I =11 %
PVIFA ( 20 years , 11%) = 7.9633
Present Value of Investment = 31200 * 7.9633 = $248455
Hence Arthur Should Invest $ 248455 today