CAFM Fleet Financial Management 3

Question 1

A fleet manager notices that fixed costs remain constant regardless of fleet utilization. Which of the following is a fixed fleet cost?

Accepted Answer

Vehicle depreciation

Answer

Fuel expense

Answer

Tire replacement

Answer

Tolls and parking fees

Question 2

In fleet financial analysis, what does the term 'lifecycle cost' encompass?

Accepted Answer

All costs from acquisition through disposal including fuel, maintenance, and financing

Answer

Only the purchase price and depreciation

Answer

Annual insurance and registration fees only

Answer

Residual value minus purchase price

Question 3

Which financial analysis method discounts future cash flows back to today's value to evaluate a fleet investment?

Accepted Answer

Net present value (NPV)

Answer

Payback period analysis

Answer

Simple return on investment

Answer

Cost per mile calculation

Question 4

A fleet manager is preparing a zero-based budget. What distinguishes this from a traditional incremental budget?

Accepted Answer

Every expense must be justified from scratch regardless of prior year spending

Answer

It uses last year's figures plus an inflation factor

Answer

It focuses only on capital expenditures

Answer

It is based solely on mileage projections

Question 5

When a fleet vehicle is sold at auction for more than its book value, the difference is classified as:

Accepted Answer

A gain on sale of asset

Answer

Operating revenue

Answer

Depreciation recapture only

Answer

Deferred income

Question 6

A fleet manager needs to justify a telematics investment to the CFO. The most persuasive financial argument would focus on:

Accepted Answer

Quantified ROI through fuel savings, reduced accidents, and lower maintenance costs

Answer

The number of GPS units installed

Answer

The vendor's market share in telematics

Answer

Employee satisfaction with navigation features

Question 7

Which IRS depreciation method allows fleet managers to deduct a larger portion of a vehicle's cost in the early years of ownership?

Accepted Answer

Modified Accelerated Cost Recovery System (MACRS)

Answer

Straight-line depreciation

Answer

Units-of-production method

Answer

Sum-of-the-years-digits (for standard fleet)