Certified Government Financial Manager (CGFM) Practice Exam 2026 – Your All-in-One Guide to Exam Success!

Question: 1 / 875

What is the most discretionary type of cost that can be postponed during economic downturns?

Debt service

Operating costs

Personnel costs

Capital costs

Capital costs are considered the most discretionary type of cost that can be postponed during economic downturns due to the nature of the investments typically associated with them. These costs usually pertain to long-term expenditures on projects, such as purchasing new equipment, constructing facilities, or upgrading technology. In challenging economic times, organizations often prioritize immediate operational needs and may choose to delay or scale back on capital projects until financial conditions stabilize.

This postponement can be strategic, allowing an organization to conserve cash and direct funds toward essential areas that maintain ongoing operations. While other costs, like personnel and operating costs, might also be adjusted during downturns, they typically involve more immediate implications for staffing and daily functioning, making them less discretionary compared to capital expenditures.

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