CAFM Financial Management 5

Question 1

Which metric is most useful for benchmarking a fleet's financial performance against industry peers?

Accepted Answer

Cost per mile by vehicle category

Answer

Cost per mile normalized by vehicle category allows apples-to-apples comparison across fleets of different sizes and compositions.

Question 2

A fleet manager is deciding between in-house fueling infrastructure and retail fuel cards. Which financial factor most strongly favors in-house fueling?

Accepted Answer

Higher fuel price discounts and elimination of retail markup on high-volume consumption

Answer

High-volume, centralized fueling eliminates retail markup and achieves bulk pricing that outweighs the capital investment for fleets with sufficient volume.

Question 3

Under GASB 34 guidelines applicable to government fleets, how must fleet assets be reported?

Accepted Answer

Capitalized and depreciated over their useful lives on the government's financial statements

Answer

GASB 34 requires government entities to capitalize infrastructure and fleet assets and report depreciation, reflecting the true cost of service delivery.

Question 4

What is the effect of a higher residual value assumption on a closed-end vehicle lease payment?

Accepted Answer

Decreases the monthly lease payment

Answer

A higher residual value reduces the depreciation component (the amount being financed over the lease term), thereby lowering monthly payments.

Question 5

Which cost category should be excluded when calculating the variable cost per mile for fleet reporting purposes?

Accepted Answer

Vehicle depreciation

Answer

Depreciation is a fixed or scheduled cost unrelated to miles driven in any given period and should be reported separately from true variable operating costs.

CAFM - Certified Automotive Fleet Manager Practice Test

CAFM - Certified Automotive Fleet Manager Practice Test

CAFM Financial Management 5