CAFM Fleet Financial Management 5

Question 1

A fleet manager discovers that a preventive maintenance program reduced unplanned repair costs by $120,000 annually but cost $45,000 to implement. What is the net annual financial benefit?

Accepted Answer

$75,000

Answer

Net benefit = Savings − Program cost = $120,000 − $45,000 = $75,000 annually.

Question 2

Which financial statement would a fleet manager primarily use to assess whether the fleet operation has sufficient cash to cover upcoming lease payments and maintenance obligations?

Accepted Answer

Statement of cash flows

Answer

The statement of cash flows shows actual cash inflows and outflows, making it the best tool for evaluating liquidity and ability to meet near-term obligations.

Question 3

When fleet vehicles are used for both business and personal purposes, what is the fleet manager's primary tax compliance responsibility?

Accepted Answer

Tracking and reporting the personal use portion as a taxable fringe benefit

Answer

IRS rules require that personal use of company vehicles be valued and reported as a taxable fringe benefit on the employee's W-2.

Question 4

A fleet manager is building a business case to right-size the fleet by eliminating underutilized vehicles. The most compelling financial metric to present is:

Accepted Answer

Annual fixed cost savings per eliminated vehicle

Answer

Quantifying the fixed costs (depreciation, insurance, registration) eliminated per removed vehicle directly demonstrates the financial impact of right-sizing.

Question 5

Under a closed-end fleet lease, the lessee's financial exposure at lease termination is primarily limited to:

Accepted Answer

Excess mileage and damage charges beyond normal wear

Answer

In a closed-end lease, the lessor bears the residual value risk; the lessee is only responsible for excess miles driven and damage beyond normal wear and tear.

CAFM - Certified Automotive Fleet Manager Practice Test

CAFM - Certified Automotive Fleet Manager Practice Test

CAFM Fleet Financial Management 5