CEM Equipment Acquisition & Disposal 5 — Questions and Answers
Question 1: When disposing of computer equipment used at trade show registration desks, which federal law governs data security obligations before disposal?
- Americans with Disabilities Act (ADA)
- FTC Safeguards Rule / FACTA Disposal Rule (Correct answer)
- Sarbanes-Oxley Act Section 404
- Sherman Antitrust Act
Correct answer: FTC Safeguards Rule / FACTA Disposal Rule
The FTC Disposal Rule and Safeguards Rule require businesses to take reasonable measures to destroy sensitive data stored on devices before disposal.
Question 2: An exhibition manager negotiates a volume discount on booth carpet. This tactic is an example of which procurement leverage strategy?
- Specification tightening
- Supply consolidation / spend aggregation (Correct answer)
- Reverse logistics optimization
- Vendor tiering
Correct answer: Supply consolidation / spend aggregation
Aggregating purchasing volume with a single supplier increases buying power, enabling negotiation of lower per-unit pricing.
Question 3: A venue is retiring a generator that used R-22 refrigerant. What regulatory requirement applies to its disposal?
- OSHA Lockout/Tagout Standard
- EPA Section 608 refrigerant recovery requirements (Correct answer)
- DOT hazardous materials shipping rules only
- Local fire code permits
Correct answer: EPA Section 608 refrigerant recovery requirements
EPA Section 608 of the Clean Air Act prohibits venting refrigerants and requires certified technicians to recover them before equipment disposal.
Question 4: Which factor most significantly increases the residual value of leased exhibition equipment at lease end?
- High initial purchase price
- Low utilization and well-documented preventive maintenance (Correct answer)
- The lease term length
- The lessee's credit score
Correct answer: Low utilization and well-documented preventive maintenance
Equipment with low wear and complete maintenance records commands higher residual value because it demonstrates preserved operational condition.
Question 5: An exhibition organization is evaluating two forklifts: one electric and one propane. For an indoor show environment, which acquisition factor is most critical beyond purchase price?
- Exterior paint color
- Indoor air quality and emissions compliance (Correct answer)
- Country of manufacture
- Tire tread pattern
Correct answer: Indoor air quality and emissions compliance
Propane forklifts emit carbon monoxide, making emissions compliance and ventilation requirements a critical factor for enclosed exhibition halls.
Question 6: A trade show organization transfers equipment to a subsidiary at below-market value. Which accounting concern does this raise?
- Asset impairment write-down
- Related-party transaction disclosure and transfer pricing scrutiny (Correct answer)
- Goodwill amortization
- Accounts receivable aging
Correct answer: Related-party transaction disclosure and transfer pricing scrutiny
Below-market transfers between related entities require disclosure and may be scrutinized by auditors and tax authorities for transfer pricing compliance.
Question 7: Which metric best measures the efficiency of an exhibition organization's equipment acquisition process?
- Number of vendors contacted
- Purchase cycle time from requisition to delivery (Correct answer)
- Square footage of storage space used
- Number of equipment categories owned
Correct answer: Purchase cycle time from requisition to delivery
Purchase cycle time tracks how quickly the organization moves from identifying a need to receiving equipment, revealing procurement bottlenecks.
CEM Equipment Acquisition & Disposal 5
When disposing of computer equipment used at trade show registration desks, which federal law governs data security obligations before disposal?