CHFM - Certified Healthcare Facility Manager Finance and Budgeting Questions and Answers

Question 1

A facility manager must replace a 25-year-old main chiller. This significant, high-cost expenditure for a long-term asset should be planned and funded through which type of budget?

Accepted Answer

The capital budget

Answer

A departmental chargeback budget

Answer

A contingency fund

Answer

The operating budget

Question 2

When evaluating proposals for a new roofing system, a Healthcare Facility Manager is considering not only the initial installation cost but also the projected costs for maintenance, repairs, and eventual replacement over its 30-year lifespan. This comprehensive financial evaluation method is known as:

Accepted Answer

Life Cycle Cost Analysis (LCCA)

Answer

Return on Investment (ROI) Analysis

Answer

Zero-Based Budgeting (ZBB)

Answer

Pro Forma Financial Statement

Question 3

At the end of the third quarter, a facility manager reviews the utility budget and discovers that electricity costs are 15% higher than projected, resulting in an unfavorable variance. Which of the following is the MOST appropriate initial action?

Accepted Answer

Investigate the root cause of the increase, such as rate changes, increased consumption, or equipment inefficiency.

Answer

Immediately request a 15% budget increase from the finance department to cover the shortfall.

Answer

Reduce preventive maintenance schedules on non-critical equipment to offset the overage.

Answer

Assume the variance is due to seasonal weather changes and take no action until the year-end review.

Question 4

Which of the following costs would MOST likely be included in a healthcare facility's annual operating budget?

Accepted Answer

Service contracts for HVAC and elevator maintenance.

Answer

The construction of a new outpatient surgery center.

Answer

The purchase of a replacement MRI machine.

Answer

A five-year facade restoration project.

Question 5

A facility manager wants to secure capital funding for an LED lighting retrofit project that promises significant energy savings over time. To make the strongest business case to the hospital's finance committee, the manager should primarily focus the proposal on:

Accepted Answer

The project's projected Return on Investment (ROI) and payback period.

Answer

The aesthetic improvement to the facility's appearance.

Answer

The popularity of 'green' initiatives among staff and patients.

Answer

The positive impact the new lighting will have on employee morale.

Question 6

A hospital's new CFO has instructed all department heads, including the Facility Manager, to build their annual budget from scratch, justifying every single line item regardless of what was allocated in the previous year. This budgeting method is known as:

Accepted Answer

Zero-Based Budgeting (ZBB)

Answer

Incremental Budgeting

Answer

Activity-Based Budgeting (ABB)

Answer

Capital Budgeting

A facility manager must replace a 25-year-old main chiller.This significant, high-cost expenditure for a long-term asset should be planned and funded through which type of budget?

A facility manager must replace a 25-year-old main chiller.
This significant, high-cost expenditure for a long-term asset should be planned and funded through which type of budget?