AGA CGFM Appraisal Exam Assessment Questions and
Correct Answers with Rationales Latest Updates 2024/2025
Economic Order Quantity (EOQ) - correct answer The optimal order size to
minimize the sum of ordering, carrying, and stockout costs.
Economic Order Quantity (EOQ) Equation - correct answer EOQ = (Square
Root of) 2*annual demand*cost of each order)/unit cost*carrying cost)
Elements of Inventory Control - correct answer 1) receiving
2) inspecting
3) establishing accountability
4) safeguarding
5) monitoring
System Development Life Cycle - correct answer 1) Requirements
2) General Design
3) Detail Design
4) Coding
5) Testing and Debugging
6) Implementation
7) Review
Present Value Formula - correct answer PV=FV/(1+r)^n
Future Value Formula - correct answer FV=PV(1+r)^n
, Liquidity Ratios - correct answer Current Ratio (Assets/Liabilities)
Quick Ratio (Assets - Inventory/ Liabilities)
Receivables Ratios - correct answer Percent of Taxes Collected
(collections/levy)
Days Receivables Outstanding
Inventory Ratios - correct answer Inventory turnover (revenue from sale of
inventory/average inventory)
Average age of inventory (365/inventory turnover)
Operating Results and Budgetary Cushion Ratios - correct answer
Revenues/Expenditures (Expenditures covered by revenues)
Excess Revenue over Expenditures/Revenues (ability to generate a surplus or
net income)
Unassigned Fund Balance/Annual Revenue (size of budgetary cushion)
Debt Burden and Financial Flexibility Ratios - correct answer Outstanding Long
Term Debt/Population
Outstanding Long Term Debt/Assessed Value of Taxable Property
Total Debt Service/Total Revenue
Excess Revenue Over Operating Expenses/Principal Payment + Interest
Expense
Pension Fund Assets Available/Pension Benefit Obligation
Budget and Accounting Procedures Act of 1950 - correct answer Federal
Agency heads must establish internal controls
Correct Answers with Rationales Latest Updates 2024/2025
Economic Order Quantity (EOQ) - correct answer The optimal order size to
minimize the sum of ordering, carrying, and stockout costs.
Economic Order Quantity (EOQ) Equation - correct answer EOQ = (Square
Root of) 2*annual demand*cost of each order)/unit cost*carrying cost)
Elements of Inventory Control - correct answer 1) receiving
2) inspecting
3) establishing accountability
4) safeguarding
5) monitoring
System Development Life Cycle - correct answer 1) Requirements
2) General Design
3) Detail Design
4) Coding
5) Testing and Debugging
6) Implementation
7) Review
Present Value Formula - correct answer PV=FV/(1+r)^n
Future Value Formula - correct answer FV=PV(1+r)^n
, Liquidity Ratios - correct answer Current Ratio (Assets/Liabilities)
Quick Ratio (Assets - Inventory/ Liabilities)
Receivables Ratios - correct answer Percent of Taxes Collected
(collections/levy)
Days Receivables Outstanding
Inventory Ratios - correct answer Inventory turnover (revenue from sale of
inventory/average inventory)
Average age of inventory (365/inventory turnover)
Operating Results and Budgetary Cushion Ratios - correct answer
Revenues/Expenditures (Expenditures covered by revenues)
Excess Revenue over Expenditures/Revenues (ability to generate a surplus or
net income)
Unassigned Fund Balance/Annual Revenue (size of budgetary cushion)
Debt Burden and Financial Flexibility Ratios - correct answer Outstanding Long
Term Debt/Population
Outstanding Long Term Debt/Assessed Value of Taxable Property
Total Debt Service/Total Revenue
Excess Revenue Over Operating Expenses/Principal Payment + Interest
Expense
Pension Fund Assets Available/Pension Benefit Obligation
Budget and Accounting Procedures Act of 1950 - correct answer Federal
Agency heads must establish internal controls
