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Appendix B The Four C’s and Five Pillars
Directions: Consult Ch. 1 and the glossary of Financial Management in Health Care Organizations as well as other outside sources as necessary in order to complete the tables in Parts I and II. Provide a definition in your own words for each term, as well as a real-world example. The examples need not be from the field of health care. Part I: The Four C’s Term Cost Definition the amount of payment required to receive goods or services cash or any other monetary resource that can be used for purchases or investments Money, such as coins or paper money Real-world example The cost of gasoline needs to be cut in half.
I would like to have more capital to ensure I can pay to put gas in my car. I did not have any cash in my pocket to pay for gasoline.
Although I don't like hanging out with Jerry the opportunity cost is worth it. researching local gas prices online as well as keeping track of my mileage is part of my maximizing behavior to get the best gas at the cheapest price I use defensive driving for gas conservation and risk aversion When I was a pizza delivery driver.Conservation The protection or management of a resource I need a car that can assist me with both gasoline conservation as well as cash conservation. Part II: The Five Pillars of Financial Practice Term Cash flows Definition the income and expenditures as well as the amount of funds available searching for the best possible return or lowest overall cost Real-world example the way I see it. my time value of money sometimes included excessive use of gasoline. my cash flows like a river through the center of the Sahara desert. he works at a gas station and alerts me when the prices are going up Maximizing behavior Risk aversion a strong feeling of dislike for danger. damage. or loss Time value of money the amount a sum of money could be worth after a given period of time The amount of payment required to take advantage of a favorable prospect Opportunity cost HCA 270 .