CAFM Fleet Financial Management 4

Question 1

A fleet manager is calculating cost per mile for a vehicle that drove 18,000 miles last year with total costs of $9,900. What is the cost per mile?

Accepted Answer

$0.55

Answer

Cost per mile = Total costs ÷ Miles driven = $9,900 ÷ 18,000 = $0.55 per mile.

Question 2

In an open-end fleet lease, who bears the risk if the vehicle's actual market value at lease end is lower than the projected residual value?

Accepted Answer

The lessee (fleet company)

Answer

In an open-end lease, the lessee is responsible for any shortfall between the actual market value and the guaranteed residual value at lease end.

Question 3

Which variance analysis would a fleet manager use to determine why actual fuel costs exceeded the budgeted amount?

Accepted Answer

Volume variance and price variance

Answer

Fuel cost variances are typically split into volume variance (more miles driven than planned) and price variance (higher fuel price per gallon than budgeted).

Question 4

A fleet manager is comparing two vehicles for acquisition. Vehicle A has a lower purchase price but higher maintenance costs over 5 years. The best financial comparison method is:

Accepted Answer

Calculate total cost of ownership for both over the same period

Answer

Total cost of ownership (TCO) over a consistent time period is the correct method, as it captures all costs including acquisition, fuel, maintenance, and disposal.

Question 5

What is the purpose of a fleet remarketing strategy in financial management?

Accepted Answer

To maximize proceeds from vehicle disposal and reduce holding costs

Answer

Remarketing strategies optimize when and how vehicles are sold to maximize resale value and minimize the time and cost of holding depreciating assets.

CAFM - Certified Automotive Fleet Manager Practice Test

CAFM - Certified Automotive Fleet Manager Practice Test

CAFM Fleet Financial Management 4