Financial Stewardship Flashcards
7 cards from real ASHE practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Financial Stewardship flashcards as text
A hospital is conducting an energy audit and discovers that lighting accounts for 28% of total electricity spend. Which financial tool best evaluates a proposed LED retrofit investment?
Answer: Net present value (NPV) analysis of energy savings over the project's useful life
NPV analysis discounts projected future energy savings back to present value, providing the most rigorous financial evaluation of a capital investment like an LED retrofit.
Under the ASHE guidelines, what is the primary financial purpose of tracking the maintenance staffing ratio (square feet per maintenance FTE)?
Answer: To benchmark labor productivity and identify under- or overstaffing relative to industry norms
The square feet per maintenance FTE ratio benchmarks labor productivity against industry standards, helping identify whether staffing levels are financially optimal.
A new hospital wing is being designed. At which project phase does value engineering (VE) provide the greatest financial benefit?
Answer: During the schematic or design development phase before construction documents are finalized
Value engineering during schematic or design development identifies cost-saving alternatives when changes are least expensive to implement and most impactful on total project cost.
Which financial statement provides the most direct insight into a healthcare facility's ability to fund a large deferred maintenance project without incurring new debt?
Answer: Cash flow statement, specifically operating cash flow
The cash flow statement's operating cash flow section shows how much cash the facility generates from operations and is available to fund capital projects without borrowing.
A hospital is comparing two boiler replacement options: Option A costs $800,000 with 90% efficiency and Option B costs $1.1 million with 95% efficiency. Which analysis determines the financial break-even between the options?
Answer: Incremental cost divided by annual fuel cost savings from the efficiency difference
Dividing the $300,000 cost premium of Option B by the annual fuel savings from the 5% efficiency gain determines how many years until the higher-efficiency option pays for itself.
Which type of healthcare facilities budget is constructed from scratch each year by justifying every expense regardless of prior-year spending?
Answer: Zero-based budget
A zero-based budget requires justifying all expenditures from zero each cycle rather than adjusting prior-year actuals, promoting cost discipline and resource reallocation.
A facilities manager wants to reduce energy costs by 15% over three years. Which financial planning document should be created to guide this initiative?
Answer: Multi-year energy master plan with projected investments, savings milestones, and ROI targets
A multi-year energy master plan integrates investment projections with savings milestones and ROI targets, providing the roadmap and accountability structure needed to achieve sustained reductions.