Assume that you are the financial manager for Healthy Body Hospital and you have been asked to explain about the cost of capital to a group of non-financial managers who are also employed at this hospital. In advance of your presentation, you have been given the following three questions. Write a paragraph of approximately 100 words in response to each of these questions that will help guide your explanation to the group that you will be addressing. Because you will be speaking to a group of non-financial managers, in your own words, explain what exactly is meant by the term “cost of capital”. Prior to undertaking any capital budget project, is it important for a financial manager to understand the cost of capital? Why or why not?  What are we referring to when we discuss the “optimal capital structure” of a business? Why is the optimal capital structure also referred to as the “target capital structure”?  For a health care entity, in particular, what are some factors that you must consider when determining the entity’s target capital structure?   In addition, you decide that you would like to walk the group through the following problem and demonstrate how to calculate the corporate cost of capital. Show the calculation that is needed to determine the correct answer. Healthy Body Hospital has a target capital structure of 35 percent debt and 65 percent equity. Its cost of equity estimate is 13 percent and its cost of tax-exempt debt estimate is 7.5 percent. What is the hospital’s corporate cost of capital?

Prior to Tuesday midnight of Week 5, post at least once about this week's Wiley assignment. You are highly encourage to ask your fellow learners for help or share your own insight as you work through the assignment. Try to add constructive points to the discussion rather than, for instance, simple comments about the difficulty of the assignment. Some guiding points:   What were some interesting management accounting concepts that came up this week? At this point, do you see the management accounting approach being more or less useful than financial accounting for you? Why?

Review the scripture below.  Does God's word here have relevance to the concepts being studied in Managerial Accounting, or do spiritual and business concepts just not mix?  Please share your ideas and give examples.  Feel free to cite other sources. Luke 14:28-30 in the Bible reads:  “But don’t begin until you count the cost. For who would begin construction of a building without first calculating the cost to see if there is enough money to finish it? Otherwise, you might complete only the foundation before running out of money, and then everyone would laugh at you. They would say, ‘There’s the person who started that building and couldn’t afford to finish it!’" Explain the meaning of (a) differential revenue, (b) differential cost, and (c) differential income. A company is offered incremental business at a special price that exceeds the variable cost. What other issues must the company consider in deciding whether to accept the business? Although the cost-plus approach to product…

Complete your calculations by filling in the highlighted cells. Note: the PV Annuity table is provided for you. Discuss if you think the cookie business should accept or reject the purchase of the new equipment and why.Additional information has come to your attention regarding the equipment purchase. One of the partner's brother owns the company that sells the equipment and insists the equipment is needed. Discuss any ethical concerns you see with this type of transaction.  Cookie Business           As the owner of the Cookie Business, you are considering the following investment:           Purchase of new equipment  $  250,000.00       Expected  annual increase in sales   $    48,017.50       Time frame 7 years     Acceptable rate needed 9%                 Calculate the Internal Rate of Return:         PV of annuity factor         Internal rate of return                   Accept or reject