AHIP Exam AHM-520 Topic 5 Question 91 Discussion

Actual exam question for AHIP's AHM-520 exam

Question #: 91
Topic #: 5

[All AHM-520 Questions]

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

Proposal PI

A 0.45

B 1.05

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

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

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

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

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

Show Suggested Answer

Suggested Answer: C

by Stephanie at Jul 02, 2024, 08:19 AM

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Crista

5 months ago

I think Rosina is right. Proposal B is the better choice based on the PI.

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Rosina

5 months ago

I'm not sure. Shouldn't we choose Proposal B since it has a PI greater than 1?

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Proposal B is the clear winner here. With a PI of 1.05, it's a no-brainer. I just hope the Jade Health Plan doesn't forget to factor in the cost of replacing the accountant's calculator after all the high-fiving.

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Melvin

4 months ago

Yeah, that's a pretty clear choice. Hopefully they consider all the costs involved.

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Bernardine

4 months ago

Proposal B is definitely the way to go with a PI of 1.05.

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Cruz

5 months ago

I agree with Bette. Proposal A has a PI less than 1, so its NPV is negative.

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Stephen

5 months ago

Option D all the way, baby! Jade's gonna be rolling in the dough with that high-flying Proposal B. Although, I do wonder if they'll be hiring any court jesters to celebrate the occasion.

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Shaun

5 months ago

Hmm, the PI values don't lie. Proposal B is the way to go, no doubt. I can already smell the profit in the air!

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Tyra

5 months ago

Yeah, Proposal B definitely looks more promising for profitability.

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Nana

5 months ago

I agree, Proposal B seems like the better choice with a PI of 1.05.

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Herschel

6 months ago

Ah, the age-old question of profitability index and NPV. I'd go with option D - Proposal B, where the PI indicates the NPV is greater than zero. Seems like the most logical choice.

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Ettie

5 months ago

Yeah, Proposal B with a PI greater than zero is the way to go.

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Christiane

5 months ago

I agree with you, option D seems like the best choice.

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Bette

6 months ago

I think the answer is B.

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AHIP Exam AHM-520 Topic 5 Question 91 Discussion

Contribute your Thoughts:

Crista

Rosina

Maile

Melvin

Bernardine

Cruz

Stephen

Shaun

Tyra

Nana

Herschel

Ettie

Christiane

Bette