Asset Management Flashcards
7 cards from real CAFM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Asset Management flashcards as text
Which depreciation method allocates an equal amount of cost each year over the asset's useful life?
Answer: Straight-line
Straight-line depreciation divides the asset's depreciable cost evenly across each year of its useful life.
A fleet manager wants to compare the total cost of owning a vehicle versus leasing it. Which metric is most appropriate?
Answer: Total cost of ownership (TCO)
TCO accounts for acquisition, fuel, maintenance, insurance, and disposal costs, enabling a fair buy-vs-lease comparison.
What is the term for the scheduled replacement of fleet vehicles based on predetermined criteria such as age or mileage?
Answer: Fleet cycling
Fleet cycling refers to systematically replacing vehicles when they reach defined age, mileage, or cost thresholds.
An organization chooses not to capitalize a vehicle purchase and instead expenses it immediately. This decision is most influenced by:
Answer: The company's capitalization threshold policy
Capitalization threshold policies define the minimum dollar amount that must be treated as a capital asset rather than an expense.
Which of the following best describes 'residual value' in fleet asset management?
Answer: The estimated market value of a vehicle at the end of a lease or ownership period
Residual value is the projected worth of the vehicle at disposition, which directly affects lease payments and replacement timing decisions.
A fleet manager reviews vehicles with high maintenance costs but low mileage. The BEST course of action is to:
Answer: Evaluate early replacement or remarketing
High maintenance costs relative to utilization signal poor economic return, making early disposal or remarketing the prudent financial decision.
Which document formally records the assignment of a fleet vehicle to a specific driver or department?
Answer: Vehicle assignment agreement
A vehicle assignment agreement documents responsibility, personal-use rules, and accountability for a specific vehicle-driver or vehicle-department pairing.