AACE International Certified Cost Professional (CCP) CCP Exam Questions

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Total 189 questions
Question 1

An agricultural corporation that paid 53% in income tax wanted to build a grain elevator designed to last twenty-five (25) years at a cost of $80,000 with no salvage value. Annual income generated would be $22,500 and annual expenditures were to be $12,000.

Answer the question using a straight line depreciation and a 10% interest rate.

Which of the following would NOT be considered part of a project cost and schedule forecast?



Answer : C

A peripherals report is not typically considered part of a project cost and schedule forecast. Forecasts generally focus on usage of contingency, current trends of time and money, and changes to the project execution plan. These elements directly impact the financial and scheduling aspects of a project. A peripherals report might refer to ancillary details or additional documentation that doesn't directly influence cost or schedule forecasts. Hence, the correct answer is C. Peripherals report.


Question 2

A major theme park is expanding the existing facility over a five-year period. The design phase will be completed one year after the contract is awarded. Major engineering drawings will be finalized two years after the design contract is awarded and construction will begin three years after the award of the design contract. New, unique ride technology will be used and an estimate will need to be developed to identify these costs that have no historical data.

After an individual's safety needs are met, what needs would the individual be motivated to fulfill next in Maslow's hierarchy of needs?



Answer : A

After an individual's safety needs are met, Maslow's hierarchy indicates the next needs to be fulfilled.

Maslow's Hierarchy of Needs:

Once safety needs are met, the next level in the hierarchy is Belongingness needs, which includes the need for social connections, relationships, and feeling part of a group.


Question 3

The following question requires your selection of CCC/CCE Scenario 2 (2.3.50.1.2) from the right side of your split screen, using the drop down menu, to reference during your response/choice of responses.

9,375 hours have been expended to date. Planned completion at this time is 75%. The project is determined to be 66% complete. What is the current schedule performance index (SPI)?



Answer : B

The Schedule Performance Index (SPI) is calculated using the formula:

SPI=EarnedValue(EV)PlannedValue(PV)\text{SPI} = \frac{\text{Earned Value (EV)}}{\text{Planned Value (PV)}}SPI=PlannedValue(PV)EarnedValue(EV)

Given:

Total Budgeted Hours = 12,000 hours

Planned Completion = 75%

Percent Complete = 66%

EV=12,0000.66=7,920hours\text{EV} = 12,000 \times 0.66 = 7,920 \text{ hours}EV=12,0000.66=7,920hours PV=12,0000.75=9,000hours\text{PV} = 12,000 \times 0.75 = 9,000 \text{ hours}PV=12,0000.75=9,000hours SPI=7,9209,0000.88\text{SPI} = \frac{7,920}{9,000} \approx 0.88SPI=9,0007,9200.88

So, the correct answer is B. 0.88.


Question 4

A major theme park is expanding the existing facility over a five-year period. The design phase will be completed one year after the contract is awarded. Major engineering drawings will be finalized two years after the design contract is awarded and construction will begin three years after the award of the design contract. New, unique ride technology will be used and an estimate will need to be developed to identify these costs that have no historical data.

Fred Fiedler's contingency model suggests that:



Answer : B

Given Scenario:

Fred Fiedler's contingency model is referenced.

Fiedler's Contingency Model:

This model suggests that successful leadership depends on the match between a leader's style and the demands of the situation. A leader's effectiveness is contingent on how well the leader's style fits the context of the situation.


Question 5

Money is value. Having money when you need it is very important. Money can also be valuable when used wisely by knowing when to spend and when to conserve Also, planning now for future expenses can be a plus to the company rather than a debit.

There are several ways to capitalize money and spending. Basically there is the single payment method that has a compound amount factor and a present worth factor. There is the uniform annual series that has a sinking fund factor, capital recovery factor and also the compound amount factor and present worth factor. At this point, we can assure money is worth 10%.

The following question requires your selection of CCC/CCE Scenario 7 (4.8.50.1.1) from the right side of your split screen, using the drop down menu, to reference during your response/choice of responses.

If $10,000 is scheduled to be paid out 5 years from now, what is the minimum amount we can invest today?



Answer : C

Given Scenario:

You need to determine the minimum amount to invest today for a $10,000 payout in 5 years with a 10% interest rate.

The problem requires calculating the present value of a future sum. The present value (PV) is calculated using the formula:

PV=FV(1+r)nPV = \frac{FV}{(1 + r)^n}PV=(1+r)nFV

where FVFVFV is the future value, rrr is the interest rate, and nnn is the number of years.

FV=10,000FV = 10,000FV=10,000

r=10%=0.10r = 10\% = 0.10r=10%=0.10

n=5n = 5n=5

PV=10,000(1+0.10)5=10,0001.610516,209PV = \frac{10,000}{(1 + 0.10)^5} = \frac{10,000}{1.61051} \approx 6,209PV=(1+0.10)510,000=1.6105110,0006,209


Question 6

An agricultural corporation that paid 53% in income tax wanted to build a grain elevator designed to last twenty-five (25) years at a cost of $80,000 with no salvage value. Annual income generated would be $22,500 and annual expenditures were to be $12,000.

Answer the question using a straight line depreciation and a 10% interest rate.

If $50 was invested at 6.0% on January 1, year 1, what would be the value of year-end withdrawals made in equal amounts each year for 10 years and leaving nothing in the fund after the tenth withdrawal?



Answer : C

To find the value of equal year-end withdrawals made for 10 years with an initial investment of $50 at 6% interest, you use the annuity formula:

A=PVi(1+i)n(1+i)n1A = \frac{PV \times i \times (1 + i)^n}{(1 + i)^n - 1}A=(1+i)n1PVi(1+i)n

Where:

AAA is the annuity payment (annual withdrawal)

PVPVPV is the present value ($50)

iii is the interest rate (6% or 0.06)

nnn is the number of periods (10 years)

A=500.06(1+0.06)10(1+0.06)1015.35A = \frac{50 \times 0.06 \times (1 + 0.06)^{10}}{(1 + 0.06)^{10} - 1} \approx 5.35A=(1+0.06)101500.06(1+0.06)105.35


Question 7

What do you call a person authorized to represent another (the principal) in some capacity? He/she can only act within this capacity or "scope of authority" to bind the principal.



Answer : D

An agent is a person who is legally authorized to represent another person, known as the principal, in business transactions or other matters. The agent can act on behalf of the principal and make decisions that bind the principal to certain actions or contracts. However, the agent's authority is limited to the 'scope of authority' granted by the principal. This means that the agent can only perform actions that fall within the powers explicitly or implicitly given to them.

For example, in a construction project, an agent might be authorized to negotiate contracts with suppliers or contractors on behalf of the project owner. Still, they may not have the authority to make final decisions regarding project financing unless explicitly granted by the principal. The concept of an agent is fundamental in various fields, including cost estimating and project management, where clear delegation of authority ensures that decisions are made effectively and responsibly.

This role is crucial in maintaining a structured approach to decision-making, particularly in cost management, where the agent's decisions can directly impact the financial outcomes of a project. Miscommunication or overstepping the agent's authority could lead to financial discrepancies or legal disputes, making the definition and adherence to the scope of authority essential for both cost control and legal compliance.


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