CAFM Fleet Financial Management 2

Question 1

A fleet manager is evaluating whether to replace a vehicle at 80,000 miles or hold it to 120,000 miles. Which financial concept best guides this decision?

Accepted Answer

Optimum replacement point

Answer

Depreciation schedule

Answer

Residual value calculation

Answer

Break-even analysis

Question 2

Which metric measures how efficiently a fleet operation converts revenue into profit by tracking costs as a percentage of income?

Accepted Answer

Operating ratio

Answer

Return on assets

Answer

Net present value

Answer

Cost per mile

Question 3

A fleet's vehicle costs $45,000 new and has a projected residual value of $9,000 after 5 years. What is the straight-line annual depreciation?

Accepted Answer

$7,200

Answer

$9,000

Answer

$8,000

Answer

$6,000

Question 4

When comparing a lease versus purchase decision, which cost is unique to a purchase arrangement that does not appear in a lease payment?

Accepted Answer

Opportunity cost of capital

Answer

Fuel surcharge

Answer

Insurance premium

Answer

Maintenance reserve

Question 5

A fleet manager implements a chargeback system that bills each department for its vehicle usage. The primary benefit of this approach is:

Accepted Answer

Improving cost visibility and accountability by department

Answer

Reducing total fleet size automatically

Answer

Eliminating the need for a fleet budget

Answer

Lowering insurance premiums across the fleet

Question 6

Under GAAP, when a company purchases a fleet vehicle, how is the acquisition typically recorded on the balance sheet?

Accepted Answer

As a long-term asset subject to depreciation

Answer

As a current liability

Answer

As an operating expense in the period purchased

Answer

As deferred revenue

Question 7

Which type of fleet lease transfers substantially all risks and rewards of ownership to the lessee and must be recorded on the lessee's balance sheet under ASC 842?

Accepted Answer

Finance lease

Answer

Operating lease

Answer

Open-end lease

Answer

Net lease