Budgeting & Financial Management Flashcards

For an international meeting in the EU, which tax may a foreign organizer be able to partially reclaim on eligible expenses?

Answer: Value-added tax (VAT)

VAT on certain business expenses may be recoverable by foreign businesses through refund procedures.

A meeting's sponsorship package offers exclusive branding to one sponsor per category. What is the financial benefit of exclusivity?

Answer: It allows a premium price for the sponsorship

Exclusive rights increase sponsor value, supporting a higher price point.

Which expense is generally categorized as indirect (overhead) rather than a direct event cost?

Answer: A share of the organization's office rent and staff salaries

Allocated office and staff costs support many activities and are treated as overhead.

A cancellation clause specifies liquidated damages of 50% of anticipated revenue if canceled 180 days out. Anticipated room and F&B revenue is $300,000. What is owed?

Answer: $150,000

50% of $300,000 = $150,000 in liquidated damages.

What does a negative budget variance on an expense line mean?

Answer: Actual spending exceeded the budgeted amount

An unfavorable expense variance means actual costs ran over budget.

An event's per-attendee cost is $350 and the organization wants a 20% margin on price. What registration fee is required?

Answer: $437.50

For a 20% margin on price, fee = cost ÷ (1 − 0.20) = $350 ÷ 0.80 = $437.50.

Which approach best reduces financial exposure from a force majeure event such as a hurricane?

Answer: Purchasing event cancellation insurance and negotiating clear force majeure terms

Cancellation insurance plus well-drafted force majeure clauses transfer and limit financial risk.