Financial and Asset 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 Financial and Asset Management flashcards as text
When calculating an aircraft's hourly maintenance reserve, which factor is MOST important to include?
Answer: Projected costs of scheduled inspections and engine overhauls prorated per flight hour
Maintenance reserves accrue funds per flight hour for future scheduled events like inspections and overhauls.
A company is evaluating a $10 million aircraft purchase using discounted cash flow analysis. What does a positive net present value (NPV) indicate?
Answer: The projected benefits exceed the costs when adjusted for the time value of money
A positive NPV means discounted future benefits outweigh discounted costs, supporting the investment.
Which depreciation method allows the largest deductions in the early years of an aircraft's tax life under the U.S. tax code?
Answer: Accelerated depreciation such as MACRS
MACRS front-loads depreciation deductions, giving larger tax benefits in the early years of ownership.
An aviation manager tracks the market value of the department's aircraft annually. Which factor typically has the GREATEST negative effect on resale value?
Answer: High airframe total time and engines near overhaul
High total time combined with engines approaching costly overhauls significantly depresses aircraft resale value.
What is the primary purpose of a fixed-versus-variable cost breakdown in flight department financial reporting?
Answer: It shows how total costs change with utilization, supporting accurate trip costing and fleet decisions
Separating fixed from variable costs reveals cost behavior with flight activity, enabling accurate per-trip and utilization analysis.
A flight department charges internal business units for aircraft use. What is this practice called?
Answer: Chargeback or cost allocation
Chargeback systems allocate flight department costs to the internal business units that use the aircraft.
Which insurance coverage protects the company against loss or damage to the aircraft itself?
Answer: Hull insurance
Hull insurance covers physical damage to or loss of the aircraft, while liability covers third-party claims.