The difference between liquidation and reorganization

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Reference no: EM131866252

1. The difference between liquidation and reorganization is that a:

liquidation deals with net working capital while a reorganization deals with long-term liabilities.

liquidation terminates all operations and a reorganization maintains the option of the firm as a going concern.

a liquidation must occur outside of bankruptcy while a reorganization involves the bankruptcy process.

reorganization terminates all operations of the firm while a liquidation only terminates non-profitable operations.

liquidation terminates all operations immediately while a reorganization terminates operations over two, or more, years.

2. Assume a hospital admits 1,000 patients per month who stay an average of 4.75 days per admission. The hospital charges $10,000 per admission and incure $6,900 in costs ($3,000 fixed and $3,900 variable) per patient. Determine Gross revenue, contractural discounts, revenue, expenses, and net income for the following methods: capitation, charge, cost, per diem and per case

A. 80% of charges

B. $1,600 per diem

C. $4,150 per case

D. $210 per member per month, assume the number of covered lives is 30,000

Reference no: EM131866252

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