CEM Equipment Acquisition & Disposal 2

Question 1

When evaluating a lease vs. purchase decision for exhibition AV equipment, which financial metric best accounts for the time value of money?

Accepted Answer

Net present value (NPV)

Answer

NPV discounts future cash flows to present value, making it the most accurate tool for comparing lease vs. purchase costs over time.

Question 2

A venue needs to dispose of aging rigging equipment. Which action should be taken FIRST before disposal?

Accepted Answer

Conduct a safety inspection and document the equipment's condition

Answer

Documenting condition through a safety inspection protects the organization from liability and ensures proper disposal pathways are selected.

Question 3

Which depreciation method results in the highest expense in the early years of an asset's life?

Accepted Answer

Double declining balance depreciation

Answer

Double declining balance applies twice the straight-line rate to the book value each year, front-loading depreciation expenses.

Question 4

An exhibition manager is acquiring custom-branded booth furniture. Which procurement approach offers the most price leverage?

Accepted Answer

Competitive bidding with at least three vendors

Answer

Soliciting bids from multiple vendors creates competition that typically drives down pricing and improves terms.

Question 5

Which document establishes the specific technical requirements equipment must meet before a purchase order is issued?

Accepted Answer

Equipment specification sheet

Answer

An equipment specification sheet details exact performance, dimensional, and compliance standards the purchased equipment must satisfy.

(CEM) Certified in Exhibition Management Practice Test