CAFM Financial Management & Budgeting 2

Question 1

A fleet manager is preparing a capital budget request for 15 new vehicles. Which financial metric BEST demonstrates return on investment to senior leadership?

Accepted Answer

Net present value (NPV) of future cost savings

Answer

Total sticker price of the vehicles

Answer

Number of vehicles replaced per year

Answer

Average fuel cost per vehicle

Question 2

Which cost is classified as a fixed fleet operating cost?

Accepted Answer

Insurance premiums

Answer

Fuel expenditure

Answer

Tire replacement

Answer

Oil changes

Question 3

What does a fleet's 'cost per mile' metric primarily help a fleet manager evaluate?

Accepted Answer

Overall operational efficiency and vehicle lifecycle economics

Answer

Driver satisfaction scores

Answer

The number of accidents per route

Answer

Vendor contract compliance

Question 4

When using zero-based budgeting (ZBB) for fleet, the manager must:

Accepted Answer

Justify every budget line item from scratch each cycle

Answer

Increase last year's budget by a fixed percentage

Answer

Remove all capital expenditures from the plan

Answer

Base spending only on historical averages

Question 5

A fleet manager observes that maintenance costs spike in Q4 each year. The MOST appropriate budgeting response is to:

Accepted Answer

Use monthly accruals to smooth the expense across the year

Answer

Reduce the maintenance budget in Q4

Answer

Delay all Q4 maintenance to Q1

Answer

Assign extra drivers in Q4 only

Question 6

Which disposal method typically yields the HIGHEST residual value for fleet vehicles?

Accepted Answer

Direct retail sale

Answer

Wholesale auction

Answer

Trade-in at dealership

Answer

Government surplus sale

Question 7

Under an operating lease, fleet vehicles appear on the company's financial statements as:

Accepted Answer

Off-balance-sheet obligations under older GAAP rules

Answer

Capital assets subject to depreciation

Answer

Long-term liabilities only

Answer

Inventory assets