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
Why does low annual utilization increase an aircraft's cost per flight hour?
Answer: Fixed costs are spread over fewer hours, raising the per-hour burden
Fixed costs like salaries, hangar, and insurance remain constant, so fewer flight hours means each hour absorbs more fixed cost.
Which document formally authorizes a flight department to spend money on a major capital item such as avionics upgrades?
Answer: A capital expenditure request or appropriation approved by management
Capital expenditures require a formal appropriation or CapEx approval through the company's investment process.
An aviation manager benchmarks the department's costs against similar operators. Which organization publishes widely used business aviation benchmarking data in the U.S.?
Answer: NBAA (National Business Aviation Association)
NBAA publishes benchmarking and cost survey data that flight departments use to compare their financial performance.
What is a key financial risk of deferring scheduled maintenance to reduce this year's budget?
Answer: Higher future repair costs, reduced aircraft value, and potential unscheduled downtime
Deferred maintenance typically compounds into costlier repairs, hurts resale value, and risks expensive operational disruption.
In a lease-versus-buy analysis, which factor MOST favors purchasing the aircraft?
Answer: The company can fully use depreciation tax benefits and plans long-term, high utilization
Ownership makes sense when the company can capture depreciation benefits and expects sustained long-term use.
Which item belongs in a flight department's asset inventory and tracking system?
Answer: Ground support equipment, spare parts, tooling, and avionics loaner units
Effective asset management tracks all department-owned property, including GSE, parts, and tooling, not just the aircraft.
A flight department's budget shows a favorable variance in fuel expense. What does 'favorable' mean in this context?
Answer: Actual fuel spending was less than the budgeted amount
A favorable expense variance means actual costs came in below the budgeted figure.