CTE Financial Management & Budgeting Flashcards
6 cards from real CTE practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CTE Financial Management & Budgeting flashcards as text
In telecom cost management, what does 'total cost of ownership' (TCO) analysis include beyond the initial purchase price of network equipment?
Answer: Acquisition cost plus installation, maintenance, energy consumption, training, and end-of-life disposal costs over the asset's lifetime
TCO encompasses all direct and indirect costs over an asset's lifecycle including purchase, deployment, energy, maintenance, support contracts, and eventual decommissioning to reveal the true cost of ownership.
Which US government program provides funding specifically for rural broadband infrastructure deployment that a CTE at a rural carrier should be aware of?
Answer: USDA ReConnect Program and FCC BEAD funding
The USDA ReConnect Program and NTIA BEAD (Broadband Equity, Access, and Deployment) program provide billions in grants and loans for deploying broadband infrastructure in unserved and underserved rural US areas.
What does Days Sales Outstanding (DSO) measure in a telecom company's accounts receivable management?
Answer: The average number of days it takes to collect payment after a sale, indicating billing and collection efficiency
DSO measures the average collection period for accounts receivable; a rising DSO in telecom indicates billing friction, disputes, or credit quality deterioration that can strain cash flow.
A CTE is structuring a sale-leaseback transaction for cell tower assets. What is the primary financial motivation for this transaction type?
Answer: To convert tower assets into immediate cash while retaining the right to use them, improving liquidity and unlocking capital for network investment
A sale-leaseback converts illiquid tower assets into cash by selling them to a tower company (like American Tower or Crown Castle) and then leasing them back, freeing capital for spectrum or network upgrades.
Under ASC 842 (the US GAAP lease accounting standard), how must telecom companies treat most operating leases for cell site ground leases?
Answer: Recognize a right-of-use (ROU) asset and a corresponding lease liability on the balance sheet
ASC 842 requires lessees to recognize a right-of-use asset and lease liability for nearly all leases with terms over 12 months, bringing previously off-balance-sheet operating leases onto the balance sheet.
When a US carrier reports 'free cash flow,' what does this metric represent and why do telecom investors prioritize it?
Answer: Operating cash flow minus capital expenditures, representing cash available for dividends, debt repayment, and M&A after sustaining the network
Free cash flow (FCF = operating cash flow minus CapEx) shows actual cash generated after network investment, making it the most important metric for telecom investors assessing dividend sustainability and financial health.