CEM Equipment Acquisition & Disposal 4

Question 1

Which acquisition strategy is most appropriate when only one vendor can supply a highly specialized exhibition simulator system?

Accepted Answer

Sole-source justification procurement

Answer

Sole-source procurement is justified when only one supplier can meet unique technical requirements, but it must be documented with a written justification.

Question 2

An exhibition organization wants to reduce capital expenditure by sharing infrequently used equipment with peer associations. This model is best described as?

Accepted Answer

Equipment pooling or cooperative purchasing

Answer

Equipment pooling allows multiple organizations to share assets, reducing individual capital outlay and storage costs for low-frequency items.

Question 3

Which warranty type covers defects in materials and workmanship but does NOT cover consequential damages?

Accepted Answer

Express warranty with limitation of liability clause

Answer

Express warranties with limitation clauses explicitly state coverage scope while excluding indirect damages like lost revenue from equipment failure.

Question 4

During an equipment disposal audit, an asset is found to have been fully depreciated but is still in active use. How should it be treated on the balance sheet?

Accepted Answer

Retained at zero net book value until actual disposal

Answer

Fully depreciated assets remain on the books at zero net book value and are only removed when physically disposed of or retired.

Question 5

A certified equipment appraiser values used exhibition lighting at $80,000 for insurance purposes. What type of value does this most likely represent?

Accepted Answer

Fair market value

Answer

Fair market value represents the price a willing buyer and willing seller would agree upon in an open market, commonly used for insurance appraisals.

(CEM) Certified in Exhibition Management Practice Test

(CEM) Certified in Exhibition Management Practice Test

CEM Equipment Acquisition & Disposal 4