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    Aggressive Working Capital Policy

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    An aggressive working capital policy, may increase the entity's return, but it also increases the risk.

    1. Please solve this Net Income Problem.

    A firm has the following accounts:

    Net patient revenue = $1,500,000
    Supply expense = $200,000
    Depreciation expense = $100,000
    Salaries and benefits = $700,000
    Other expenses = $200,000
    Net accounts receivable = $150,000

    What is the net income for the period?
    Hint: Net accounts receivable is not an expense it is a income.

    2. Targeted debt to equity ratio problem: A hospital issues $20 million in bonds and $60 million in equity to finance a new project. Its targeted debt to equity ratio is?

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    $2.19