Facility Financial Management Flashcards
6 cards from real FMP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Facility Financial Management flashcards as text
What is the difference between operating expenses and capital expenditures in facility management?
Answer: Operating expenses cover day-to-day running costs while capital expenditures involve long-term asset investments
Operating expenses cover recurring daily costs while capital expenditures fund long-term investments that improve or extend asset life.
Which financial analysis method considers the time value of money when evaluating facility investments?
Answer: Net Present Value analysis
NPV discounts future cash flows to present value, providing a more accurate investment evaluation.
What is the primary purpose of a facility condition assessment in financial planning?
Answer: To identify current condition and remaining useful life of building systems for capital planning
FCAs systematically evaluate building component conditions and remaining useful life to inform capital planning decisions.
How should a facility manager justify a request for increased maintenance funding?
Answer: By presenting data showing the correlation between maintenance investment and reduced lifecycle costs
Data-driven presentations showing how maintenance investment reduces total lifecycle costs are most persuasive.
What is total cost of ownership in the context of facility equipment procurement?
Answer: The complete lifecycle cost including acquisition, operation, maintenance, and disposal
TCO encompasses all costs throughout an asset lifecycle, providing a complete picture for informed procurement decisions.
What is the purpose of a reserve fund in facility financial management?
Answer: To accumulate funds for anticipated future capital replacements and major repairs
Reserve funds set aside money for planned future capital expenditures.