CAFM Asset Management and Acquisition 4

Question 1

Which depreciation method allocates an equal expense amount for each year of a vehicle's useful life?

Accepted Answer

Straight-line depreciation

Answer

Straight-line depreciation divides the asset's depreciable cost evenly across its estimated useful life, producing equal annual charges.

Question 2

A fleet manager notices that a specific vehicle model has a high residual value after 3 years. How does this affect a lease decision?

Accepted Answer

It decreases monthly lease payments because the lessor recovers more at vehicle return

Answer

Higher residual value means the lessor expects to recover more money when selling the returned vehicle, so lower depreciation is built into monthly payments.

Question 3

What is 'whole-life costing' in the context of fleet asset management?

Accepted Answer

Analyzing all costs from acquisition through disposal over the vehicle's entire service life

Answer

Whole-life costing (also called life-cycle costing) captures every cost phase — purchase, operation, maintenance, and disposal — for complete financial comparison.

Question 4

A fleet manager wants to add telematics devices to newly acquired vehicles. At which stage of the procurement process should this requirement be addressed?

Accepted Answer

During the vehicle specification and bid document preparation phase

Answer

Including telematics requirements in specifications ensures vehicles are provisioned correctly at acquisition, avoiding costly retrofitting later.

Question 5

Which of the following is an example of an 'operating lease' characteristic?

Accepted Answer

Lease payments are structured so the vehicle is not fully amortized during the lease term

Answer

An operating lease does not fully amortize the vehicle's cost, leaving significant residual value with the lessor at lease end.

CAFM - Certified Automotive Fleet Manager Practice Test

CAFM - Certified Automotive Fleet Manager Practice Test

CAFM Asset Management and Acquisition 4