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 healthcare facility's total maintenance budget is $4.2 million and the replacement asset value (RAV) is $140 million. What is the maintenance spending ratio, and is it within the ASHE-recommended range?
Answer: 3% — within the recommended 2–4% range
The ratio is $4.2M/$140M = 3%, which falls within ASHE's recommended maintenance spending range of 2–4% of replacement asset value.
Which financial metric best measures the actual cost-effectiveness of a preventive maintenance program over a 12-month period?
Answer: Ratio of corrective to preventive maintenance labor hours
The ratio of corrective to preventive maintenance labor hours directly measures whether the PM program is reducing reactive failures and associated costs.
When preparing a five-year capital equipment replacement plan, which data source is most critical for prioritizing purchases?
Answer: Facility condition assessment (FCA) scores and equipment age
Facility condition assessment scores combined with equipment age provide objective, risk-based data for prioritizing capital equipment replacement decisions.
A health care facility is evaluating whether to outsource biomedical equipment maintenance. Which financial analysis should be conducted first?
Answer: Total cost of ownership comparison between in-house and contracted services
A total cost of ownership comparison captures all direct and indirect costs of both options, providing the most complete financial basis for the outsourcing decision.
Under GAAP, how should a major HVAC system replacement that extends the useful life of a building be recorded on financial statements?
Answer: Capitalized as a fixed asset and depreciated over its useful life
Capital improvements that extend asset useful life are capitalized under GAAP and depreciated over the remaining useful life of the improvement.
Which approach most effectively reduces a facility's deferred maintenance backlog without requiring a single large capital outlay?
Answer: Implementing a phased multi-year funding model tied to facility condition index (FCI) targets
A phased multi-year funding model tied to FCI targets allows systematic backlog reduction with predictable annual investments aligned to measurable condition goals.
A hospital CFO asks the facilities director to justify a $500,000 investment in building automation system (BAS) upgrades. Which financial justification metric is most persuasive?
Answer: Simple payback period based on projected annual energy savings
Simple payback period calculated from projected annual energy savings directly links the capital investment to quantifiable financial returns that CFOs can evaluate.