Practice Test Geeks(CAM) Certified Aviation Manager Practice Test
← All CAM Flashcard Decks

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

  1. A flight department is deciding between funding an engine overhaul from reserves or enrolling in a pay-per-hour engine program. What is the main financial benefit of the hourly program?

    Answer: It converts large unpredictable overhaul costs into stable, budgetable hourly payments

    Hourly engine programs smooth large irregular overhaul expenses into predictable payments and often protect resale value.

  2. Which financial statement shows a flight department's cash inflows and outflows over a reporting period?

    Answer: Statement of cash flows

    The statement of cash flows tracks actual cash movement, unlike the accrual-based income statement.

  3. During aircraft acquisition, what is the purpose of a pre-purchase inspection from a financial standpoint?

    Answer: To identify discrepancies and deferred maintenance that affect the aircraft's true value and negotiating position

    A pre-purchase inspection uncovers condition issues that translate directly into price adjustments or repair obligations.

  4. An aviation manager notices fuel costs rising sharply. Which strategy directly mitigates fuel price volatility?

    Answer: Negotiating contract fuel programs and volume discounts with suppliers

    Contract fuel and volume purchasing agreements lock in discounts and reduce exposure to posted retail fuel prices.

  5. What does the term 'residual value' mean in the context of aircraft financial planning?

    Answer: The estimated market value of the aircraft at the end of its planned ownership or lease period

    Residual value is the projected worth of the aircraft when the owner or lessee disposes of it, driving lease rates and ownership cost models.

  6. Which practice BEST protects a flight department against fraud in procurement and invoice payment?

    Answer: Segregation of duties so no single person controls ordering, receiving, and payment

    Segregating ordering, receiving, and payment duties creates internal checks that make fraud far harder to conceal.

  7. A company operates its aircraft 150 hours per year. Fixed costs are $900,000 annually and variable costs are $2,000 per hour. What is the total cost per flight hour?

    Answer: $8,000

    Fixed cost per hour is $900,000 divided by 150 hours ($6,000), plus $2,000 variable, totaling $8,000 per hour.