Q1.1).

The depreciation rates applied were as follows (NSW, 2015, p.132).

Q1.2).

The total comprehensive income for the financial year ended 30 June 2015 was $1,119,541,000(NSW, 2015, p.119).

Q1.3).

The total cash flows employee related was actually a cash outflow of $11,000,285,000(NSW, 2015, p.123).

Q1.4).

Aircraft ambulance services cost $ $85,365,000 in 2015(NSW, 2015, p.143).

Q2).

Fixed costs are costs that do not change with the level of activity within the relevant range (Noreen, Brewer & Garrison, 2012, p.100). For example, only a given number of nurse manager(s) will be paid a salary even when more patients are admitted to a healthcare facility so long as the capacity level is not exceeded. Another example of fixed costs is the plant rental expenses that would remain unchanged even when a few more patients are seen.

In contrast, variable costs increase or decrease with the level of activity. For instance, the units of cotton wool used in the facility will increase or decrease with the number of patients utilising cotton wool in the health facility. Similarly, the cost of food for in-patients will vary with the number of patients that have to be seen in the health facility.

Q3).

This is the cost of a resource that is obtained in large chunks but which increases or decreases only with fairly wide changes in the level of activity (Noreen, Brewer & Garrison, 2012, p.106). An example would be the cost of a specialist medical practitioner. The time of such a specialist would rarely be obtained otherwise than on a full time basis.

Q4.1).

Q4.2).

The additional day is worth the contribution it makes after deducting the variable costs and is given as below:

Q4.3)

Q4.4).

The number is the same as calculated above which is 87 bed days.

Q4.5).

As the name suggests, the break-even point is the point at which total revenues are equal to total costs. In the event that a public hospital is unable to break-even, the hospital will technically be operating at a deficit. The ramifications of this are that the hospital can be forced to shut down if there are no other sources of financing its operations. The practice, however, is that public hospitals will normally get assistance from the government and thus would not immediately close just because it is unable to break-even.

Q5).

A cursory research on the internet on the experiences of other countries shows that there is a general upsurge in the number of privately funded projects (World Bank, 2012, p.10). This has especially been the case following the 2008 financial crisis. Also becoming coming in the experiences of other countries is the involvement of multilateral development institutions (World Bank, 2012, p.123).  Such institutions include the World Bank, the African Development Bank (ADB), the European Bank for Reconstruction and Development (EBRD). A common thread running through the involvement of these institutions is the financial support that they offer to the host governments in the private funding arrangements.

Other countries have also had a diversity of experiences in terms of the breadth of the projects that are undertaken through PPPs initiatives. A unique example is the case of China which became a member of the World Trade Organisation at the turn of the millennium. Eager to attract foreign investments, the regional and local governments in China encouraged PPPs in most of their infrastructure projects. A particular feature of the PPPs in China at those early years of her membership to the WTO was the tendency to prefer foreign companies in forming collaborations for infrastructure development.  This tendency to prefer foreign partners has since been explained by the rationale that China wanted to market itself as a safe and reliable investment destination.

The overall view from the foregoing analysis, however, is that the exact nature of a PPP will depend on the particular context of the country. That context also has a bearing on whether the projects will succeed. This is particularly important given the significant role that the government plays in all PPPs to the extent that some commentators have been sceptical as to whether the arrangements should actually be called as partnerships.

Q6).

Yes, I would definitely support the use of PPP as a means of financing and managing public infrastructure projects. My reason for this stems from the fact that PPP makes it possible for citizens to access the utility of infrastructure facilities that would, otherwise, not have accessed in the absence of PPP.

Q7).

Advantages

1. Creates the incentive for the efficient use of resources.
2. Allows for the comparison of costs and performance of asset management between the public sector and the private sector.

Disadvantages

The only major disadvantage with capital charging is the complexity of creating and maintaining the system that would allow for its implementation.

References

New South Wales(NSW) Ministry of Health (2015). Annual Report 2014-2015.North Sydney,     New South Wales: New South Wales Ministry of Health.

Noreen, E.W., Brewer, P.C. & Garrison, R.H.(2012).Managerial Accounting for Managers.2^nd      edn.New York: McGraw-Hill/Irwin.

World Bank (2012). World Bank Group Support for Public Private Partnerships. New York:        Independent Evaluation Group. Retrieved from     http://www.francophonie.org/IMG/pdf/wb_ppp_eval_updated_ieg.pdf

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