CAFM Financial Management 2

Question 1

Which depreciation method results in the highest book value at the end of an asset's useful life if the asset has a residual value?

Accepted Answer

Straight-line depreciation

Answer

Double declining balance

Answer

Sum-of-the-years-digits

Answer

MACRS depreciation

Question 2

A fleet manager is evaluating two vehicles: Vehicle A has a 5-year TCO of $85,000 and Vehicle B has a 5-year TCO of $78,000. What additional factor should be considered before making a final decision?

Accepted Answer

Residual value and remarketing potential at end of cycle

Answer

Manufacturer brand reputation

Answer

Driver preference surveys

Answer

Paint color availability

Question 3

What is the primary purpose of a fleet charge-back system?

Accepted Answer

To allocate vehicle operating costs to the departments that use them

Answer

To penalize drivers for accidents

Answer

To collect fines from traffic violations

Answer

To recover costs from insurance claims

Question 4

When calculating a vehicle's break-even mileage for replacement, which cost relationship is being analyzed?

Accepted Answer

Fixed costs versus variable costs

Answer

Insurance costs versus fuel costs

Answer

Acquisition costs versus maintenance costs

Answer

Depreciation versus resale value

Question 5

A fleet department receives a budget variance report showing a 15% unfavorable fuel variance. What is the most appropriate first step?

Accepted Answer

Analyze the cause by reviewing fuel consumption data, pricing changes, and mileage

Answer

Immediately replace all high-consumption vehicles

Answer

Reduce the department's fuel budget for next year

Answer

Implement a fuel card freeze

Question 6

Which financial metric best measures how efficiently a fleet asset generates revenue relative to its total cost?

Accepted Answer

Return on Investment (ROI)

Answer

Net Present Value (NPV)

Answer

Payback period

Answer

Book value ratio

Question 7

Under a full-service lease arrangement, who typically bears responsibility for vehicle maintenance costs?

Accepted Answer

The lessor/leasing company

Answer

The fleet operator/lessee

Answer

The driver assigned to the vehicle

Answer

The vehicle manufacturer