Practice Test Geeks(CAM) Certified Aviation Manager Practice Test
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Business Management Flashcards

7 cards from real CAM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Business Management flashcards as text

  1. An aviation manager calculates that a new avionics upgrade costs $500,000 and will save $125,000 annually in operating costs. What is the simple payback period?

    Answer: 4 years

    Payback period equals investment divided by annual savings: $500,000 divided by $125,000 equals 4 years.

  2. Which capital budgeting method accounts for the time value of money when evaluating a hangar construction project?

    Answer: Net present value (NPV)

    NPV discounts future cash flows to present value, explicitly incorporating the time value of money.

  3. A flight department manager notices direct operating costs per hour rising faster than budgeted. Which cost is a direct operating cost?

    Answer: Fuel consumed per flight

    Fuel varies directly with each hour flown, making it a direct operating cost, while rent, salaries, and insurance are fixed costs.

  4. The board asks how depreciation of the company jet affects financial statements. The manager should explain that depreciation:

    Answer: Reduces reported income as a non-cash expense while lowering the asset's book value

    Depreciation is a non-cash expense that lowers net income and the asset's carrying value without consuming cash.

  5. A flight department operates under Part 91 and the parent company wants to charge a sister subsidiary for flights. The manager's first business concern should be:

    Answer: Whether the reimbursement arrangement is permissible without triggering commercial operator requirements

    Charging for transportation can cross into commercial operations, so permissible cost-reimbursement structures must be verified first.

  6. When developing a five-year strategic plan for a flight department, which element should be established first?

    Answer: The department's mission and how it supports company objectives

    Strategic planning starts with mission alignment to corporate goals, from which all objectives and resource decisions flow.

  7. An aviation manager tracks cost per seat mile for the corporate fleet. This metric is most useful for:

    Answer: Comparing the efficiency of different aircraft or travel alternatives for a given mission

    Cost per seat mile normalizes expense by capacity and distance, enabling efficiency comparisons across aircraft and travel options.