1) What type of cost is the oil needed to maintain a large piece of equipment? a) Opportunity cost b) Fixed cost c) Variable cost d) Indirect cost

2) A new piece of equipment requires special software for diagnostics and maintenance purposes. Once the software is purchased, it will not need to be purchased again. Which contract mechanism would most likely be used to procure this software? a) One-time purchase order b) Blanket purchase order c) National buy contract d) Fixed type contract

3) What happens at the end of binding mediation in a construction dispute when there are one or more disputed items that remain unresolved? a) The mediator renders a final and binding decision on those items. b) The mediator must help the parties renegotiate the contract. c) Either party can request a new mediator. d) Either party may escalate the unresolved items to litigation.

4) Which method is best suited to comparing the net present values for two capital investment projects when the cash flows vary? a) Sensitivity analysis b) Life-cycle cost analysis c) Payback period method d) Scenario analysis

5) Which type of budget requires a facility manager to perform an in-depth analysis of all line items and meticulously justify all expenditures? a) Operational budget b) Zero-based budget c) Capital budget d) Incremental budget

6) The CFO of the demand organization asks for a list of the items you track in your accounting system. Which financial document is the CFO referring to? a) Balance sheet b) Chart of accounts c) Capital budget d) Financial statement

7) Which statement about key performance indicators (KPIs) is false? a) The facility manager must translate KPIs into actionable steps for employees and service providers. b) The facility manager must write KPIs clear and concisely so they can be easily understood. c) The facility manager must develop KPIs that are quantifiable. d) The facility manager must ensure KPIs reflect the goals of the organization.

8) Which service best exemplifies out-tasking a specific function in facility management procurement? a) Marketing and leasing properties b) HR services c) Move management d) Janitorial service

9) Multiple suppliers bid on a contract for construction services. The suppliers' qualifications and experience will be assessed, and they will be rated against a minimum passing score. Which is a logical selection criterion? a) Lowest responsive bid b) Single source c) Evaluated bid d) Unique service

10) A service contract includes the statement, "Bathrooms shall appear clean and soap shall be refilled before it is empty." What is this contract wording called? a) Service protocol b) Prescriptive specification c) Service level agreement d) Performance specification

11) Which tasks would facility managers complete as part of their planning activities? a) Identifying methods to increase profits by improving energy efficiency. b) Installing motion sensor light switches to provide immediate reduction in electricity expenses. c) Monitoring energy efficiency programs to ensure they are being carried out. d) Educating building occupants on best practices for conserving energy.

12) Which section of the cash-flow statement reports information on the purchases of new air conditioning equipment? a) Financing activities b) Investing activities c) Supplemental information d) Operating activities

13) Which type of budget will identify the financial implications of undertaking a major renovation of the fitness center in a large commercial property, including the use of sustainable materials, improving the interior air quality, making energy efficiency enhancements, and providing greater access to daylight and views? a) Incremental budget b) Operational budget c) Capital budget d) Flexible budget

14) Which of the following is a plausible measure to assess the overall performance of a service provider? a) Time-related targets b) All of the statements c) Conformance to regulations and standards d) Expenditure limits

15) Which statement about double-entry accounting is false? a) It requires transactions to be recorded in at least two places. b) It does not require the total value of credit accounts and debit accounts to be equal. c) It looks at both the debit and credit sides of an account. d) It ensures the journal is always balanced.

16) Facility management food service does not have a formally approved internal billing rate. The markup percentages for catered events vary depending upon what type of function is being catered. Which chargeback system is a logical choice for this scenario? a) None of the statements b) Rates based upon actual costs and market price c) Flat fee negotiated rates at the time of request d) Tiered rates

17) What helps ensure the goal, constraints, and terms and conditions outlined in a contract are monitored and accomplished? a) Contract monitoring b) Contract administration c) Contract negotiations d) Contract closeout

18) As a newcomer to an organization, you are collecting information for the annual budgeting process. Which activity would not be appropriate to help formulate assumptions for the facility management operating budget? a) Comparisons of actual versus budgeted costs for the past several years to discover trends or patterns. b) Projecting income and expenses for five to ten years in the future. c) Discussions with accounting personnel in other organizations to gain ideas about improvements and cost trends. d) Review of FM benefit requirements, vacation, holiday, and non-productive time, including sick leave.

19) What type of contract typically solicits multiple bids and tries to move all risk to the contractor? a) Time and materials b) Open book c) Fixed price d) Cost reimbursement

20) Why is an understanding of finance and business management a key skill for facility managers? a) A facility manager who is unable to recognize financial pitfalls may incur unexpected expenses that could be detrimental to the bottom-line b) A lack of financial expertise can hinder a facility manager's contribution to discussions involving departmental and organizational strategy. c) All of the statements d) Facility managers are entrusted with one of the most expensive assets of the organization, real estate.

21) A facility manager is negotiating a contract with the owner of a construction company. They both agree that the facility manager will pay $20,000 for the services of the construction company. The facility manager and a sales representative from the construction company sign the contract. The construction company's legal team reviews the contract and declares it void. What is most likely the reason this contract was considered void? a) There was no mutual agreement made between the facility manager and the construction company's legal team. b) The sales representative from the construction company did not have the authority to sign the contract. c) The legal team did not think the contract had a lawful purpose. d) The cost of the services described in the contract is more than $20,000.

22) What is an appropriate practice when implementing cost-containment initiatives? a) Make sure actions are quantifiable and measurable b) Secure organizational commitment before taking action c) Use only proven industry best practices e) All of the statements

23) A facility manager submits a request for building management to repair a broken window in their new space. What type of cost is this? a) Indirect cost b) Opportunity cost c) Fixed cost d) Direct cost

24) A facility management pro forma cash flow statement has beginning accounts receivable and payable balances of 18,000,000 (Japanese Yen) and 20,000,000 respectively. The facility manager estimates ending balances for accounts receivable will decrease and accounts payable will increase. What is the combined effect on cash available? a) Cash will increase. b) Depends on the timing of the cash flows. c) Cash will decrease. d) Not possible to determine.

25) A facility manager is applying the concept of best value in assessing different vendor proposals for the cafeteria and vending areas in a property. Which evaluation criteria for the sourcing decision exemplifies best value? a) Anticipated retention of existing tenants and attractiveness to prospective clients b) The inclusion of non-discriminatory specifications and a transparent, open bidding process c) Strict adherence to customary practices and procedures for outsourcing common support area services d) Hard and soft measures and a comparison of all costs with required quality

26) What do asset management ratios indicate about an organization? a) Management's ability to control expenses in relation to sales. b) The relative mix of debt and equity financing. c) How well resources are used to generate revenue. d) The target performance benchmark.

27) Which activity does not provide reasonable cost containment opportunities for facility management? a) Sale of vacant property b) As contracts expire, bring all outsourced services in-house c) Analyze risk sharing with vendors d) Invest in productivity improvements

28) A life-cycle cost (LCC) analysis is being used to help determine whether the purchase of a high-performance heating ventilating and air conditioning (HVAC) system is cost-effective. What would this analysis not consider? a) Comparison with other measures of economic evaluation. b) Cash flows made time-equivalent by converting them to present values. c) Appropriate risk and uncertainty assessments. d) Customer satisfaction survey responses.

29) One budgeting approach is for top management to set the facility management budget. The goal is to reflect the organization's strategic objectives and control the decisions. What type of approach is this? a) Zero-based budgeting b) Authoritative budgeting c) Flexible budgeting. d) Participative budgeting

30) A new piece of equipment is purchased for 15,000 (SGD Singapore Dollars). The expected lifetime of the asset is five years. Which depreciation method depreciates exactly 3,000 SGD each year? a) Modified Accelerated Cost Recovery System (MACRS) b) Straight-line c) Activity method d) Accelerated depreciation

31) What information should not be included in a business case? a) An explanation of why the initiative is necessary and recommendations. b) A deadline for when the business case must be reviewed and approved or denied. c) Financial and non-financial analysis results. d) The key assumptions behind the initiative.