CAM Financial and Asset Management 3

Question 1

When calculating an aircraft's hourly maintenance reserve, which factor is MOST important to include?

Accepted Answer

Projected costs of scheduled inspections and engine overhauls prorated per flight hour

Answer

Maintenance reserves accrue funds per flight hour for future scheduled events like inspections and overhauls.

Question 2

A company is evaluating a $10 million aircraft purchase using discounted cash flow analysis. What does a positive net present value (NPV) indicate?

Accepted Answer

The projected benefits exceed the costs when adjusted for the time value of money

Answer

A positive NPV means discounted future benefits outweigh discounted costs, supporting the investment.

Question 3

Which depreciation method allows the largest deductions in the early years of an aircraft's tax life under the U.S. tax code?

Accepted Answer

Accelerated depreciation such as MACRS

Answer

MACRS front-loads depreciation deductions, giving larger tax benefits in the early years of ownership.

Question 4

An aviation manager tracks the market value of the department's aircraft annually. Which factor typically has the GREATEST negative effect on resale value?

Accepted Answer

High airframe total time and engines near overhaul

Answer

High total time combined with engines approaching costly overhauls significantly depresses aircraft resale value.

Question 5

What is the primary purpose of a fixed-versus-variable cost breakdown in flight department financial reporting?

Accepted Answer

It shows how total costs change with utilization, supporting accurate trip costing and fleet decisions

Answer

Separating fixed from variable costs reveals cost behavior with flight activity, enabling accurate per-trip and utilization analysis.

(CAM) Certified Aviation Manager Practice Test

(CAM) Certified Aviation Manager Practice Test

CAM Financial and Asset Management 3