Pass the AHIP AHIP Certification AHM-520 Questions and answers with CertsForce

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Questions # 61:

One true statement about variance analysis is that

Options:

A.

A price variance is the difference between the budgeted quantities to be sold and the actual quantities sold, multiplied by the budgeted amount


B.

Variance analysis suggests solutions to a particular problem


C.

Positive variances generally are favorable, from a health plan's point of view, for the plan's expenses but unfavorable for the plan's revenues


D.

An effective variance system typically focuses on matters that require management's attention


Expert Solution
Questions # 62:

The Jade Health Plan used a profitability index (PI) to rank the following capital proposals:

Proposal PI

A0.45

B1.05

This information indicates that, of these two projects, Jade would most likely select:

Options:

A.

Proposal A, and the PI indicates that the net present value (NPV) for this project is less than zero


B.

Proposal A, and the PI indicates that the net present value (NPV) for this project is greater than zero


C.

Proposal B, and the PI indicates that the net present value (NPV) for this project is less than zero


D.

Proposal B, and the PI indicates that the net present value (NPV) for this project is greater than zero


Expert Solution
Questions # 63:

Health plans have access to a variety of funding sources depending on whether they are operated as for-profit or not-for-profit organizations. The Verde Health Plan is a for-profit health plan and the Noir Health Plan is a not-for-profit health plan. From the answer choices below, select the response that correctly identifies whether funds from debt markets and equity markets are available to Verde and Noir:

Options:

A.

Funds from Debt Markets: available to Verde and Noir

Funds from Equity Markets: available to Verde and Noir


B.

Funds from Debt Markets: available to Verde and Noir

Funds from Equity Markets: available to Verde only


C.

Funds from Debt Markets: available to Verde only

Funds from Equity Markets: available to Noir only


D.

Funds from Debt Markets: available to Noir only

Funds from Equity Markets: available to Verde only


Expert Solution
Questions # 64:

The Proform Health Plan uses agents to market its small group business. Proform capitalizes the commission expense relating to this line of business by spreading the commissions over the premium-paying period of the healthcare coverage. This approach to expense recognition is known as:

Options:

A.

Systematic and rational allocation


B.

Matching principle


C.

Immediate recognition


D.

Associating cause and effect


Expert Solution
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