Free AACE International (CCP) Certification Sample Questions with Online Practice Test
CCP Certification Study Guide Pass CCP Fast
AACE International CCP (Certified Cost Professional) is one of the most respected certifications in the cost engineering profession. The CCP certification exam assesses proficiency in cost estimating, cost analysis, and cost management, as well as knowledge of industry standards and best practices for cost engineering.
NEW QUESTION # 99
An American company plans to acquire a new press machine from a Dutch manufacturer under the following conditions. One question remaining to be answered is the expected amount of capital recovery when salvage is accounted for.
The following question requites your selection of Scenario 1.4.150 from the tight side of your split screen. using the drop down menu, to reference during your response/choice o' responses The present worth interest factor for this purchase in the fifth year would be:
- A. 1.6105
- B. 1.6474
- C. 0.6070
- D. 0.6209
Answer: D
Explanation:
The present worth interest factor for this purchase in the fifth year can be determined using the formula for the present worth of a single amount:
PW=1(1+i)nPW = \frac{1}{(1 + i)^n}PW=(1+i)n1
Where:
iii is the interest rate (10.5% or 0.105)
nnn is the number of years (5 years)
Using the formula:
PW=1(1+0.105)5≈11.6474≈0.6209PW = \frac{1}{(1 + 0.105)^5} \approx \frac{1}{1.6474} \approx 0.6209PW=(1+0.105)51≈1.64741≈0.6209 So, the correct answer is A. 0.6209.
NEW QUESTION # 100
A used concrete pumping truck can be purchased for $125,000. The operation costs are expected to be $65,000 the first year and increase 5% each year thereafter. As a result of the purchase, the company will see an increase in income of $100,000 the first year and 5% more each subsequent year. The company uses straight-line depreciation. The truck will have a useful life of five (5) years and no salvage value. Management would like to see a 10% return on any investment. The company's tax rate is 28%.
Which numerical method of describing quantitative data is best suited in targeted marketing?
- A. Mode
- B. Range
- C. Mean
- D. Median
Answer: A
Explanation:
In targeted marketing, the mode is often the best measure of central tendency because it identifies the most frequently occurring value in a data set. This can be crucial in marketing to determine the most common preferences or behaviors among a target audience, such as the most popular product size, color, or price point. Therefore, the correct answer is B. Mode.
NEW QUESTION # 101
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.
The following question requires your selection of CCC/CCE Scenario 17 (4.2.50.1.1) from the right side of your split screen, using the drop down menu, to reference during your response/choice of responses.
What is the 25 year after tax present worth of this project?
- A. $13,738
- B. $137,466
- C. $22,533
- D. $(22,533)
Answer: B
Explanation:
To calculate the 25-year after-tax present worth of this project, we need to consider the income, expenses, depreciation, and taxes.
First, calculate the annual depreciation:
Depreciation=Initial CostLife=80,00025=3,200\text{Depreciation} = \frac{\text{Initial Cost}}{\text{Life}} = \frac{80,000}{25} = 3,200Depreciation=LifeInitial Cost=2580,000=3,200 Now, calculate the taxable income each year:
Taxable Income=Revenue-Expenses-Depreciation=22,500-12,000-3,200=7,300\text{Taxable Income} = \text{Revenue} - \text{Expenses} - \text{Depreciation} = 22,500 - 12,000 - 3,200 = 7,300Taxable Income=Revenue-Expenses-Depreciation=22,500-12,000-3,200=7,300 Calculate the tax:
Tax=Taxable Income×Tax Rate=7,300×0.53=3,869\text{Tax} = \text{Taxable Income} \times \text{Tax Rate} = 7,300 \times 0.53 = 3,869Tax=Taxable Income×Tax Rate=7,300×0.53=3,869 Net income after tax:
Net Income=Taxable Income-Tax=7,300-3,869=3,431\text{Net Income} = \text{Taxable Income} - \text{Tax} = 7,300 - 3,869 = 3,431Net Income=Taxable Income-Tax=7,300-3,869=3,431 Add back depreciation (since it's a non-cash expense):
Cash Flow=3,431+3,200=6,631\text{Cash Flow} = 3,431 + 3,200 = 6,631Cash Flow=3,431+3,200=6,631 Finally, calculate the present worth using the formula for the present worth of an annuity:
Present Worth=6,631×(1-(1+0.10)-250.10)≈137,466\text{Present Worth} = 6,631 \times \left(\frac{1-(1+0.10)^{-25}}{0.10}\right) \approx 137,466Present Worth=6,631×(0.101-(1+0.10)-25)≈137,466 So, the correct answer is B. $137,466.
NEW QUESTION # 102
What is a basic element of work or a task that must be performed over a given period of time in order to complete a project called?
- A. WBS element
- B. Resource
- C. Activity
- D. Commodity
Answer: C
Explanation:
An activity is a fundamental unit of work that must be performed over a specific period to complete a project. In project management, activities are the individual tasks or components that make up the project's work breakdown structure (WBS). Each activity is defined by its duration, required resources, and dependencies on other activities.
Activities are the building blocks of a project schedule, and understanding them is crucial for effective project planning, scheduling, and execution. By breaking down a project into activities, project managers can better estimate time and resources, monitor progress, and make adjustments as necessary to keep the project on track.
NEW QUESTION # 103
In order to withdraw $400 at the end of each year for seven years, what amount should be deposited at 6.0% interest to leave nothing in the fund at the end of seven years?
- A. $2,483
- B. $3,357
- C. $2,968
- D. $2,233
Answer: D
Explanation:
To determine the amount that should be deposited today to allow for $400 withdrawals at the end of each year for 7 years at a 6% interest rate, use the present value of an annuity formula:
PV=A×((1-(1+i)-n)i)PV = A \times \left(\frac{(1 - (1 + i)^{-n})}{i}\right)PV=A×(i(1-(1+i)-n)) Where:
PVPVPV is the present value (amount to deposit)
AAA is the annual withdrawal ($400)
iii is the interest rate (6% or 0.06)
nnn is the number of periods (7 years)
PV=400×(1-(1+0.06)-70.06)≈2,233PV = 400 \times \left(\frac{1 - (1 + 0.06)^{-7}}{0.06}\right) \approx 2,233PV=400×(0.061-(1+0.06)-7)≈2,233
NEW QUESTION # 104
After collecting the control information on a light rail project within an original budget of 200.000work hours, the construction contractor is ready for their monthly progress meeting with the client.
A total of 100.000 work hours have boon scheduled to date. with 105.000 work hours earned, and 110.000 work hours paid. The stated progress by the contractor Is 60%.
What is the schedule variance (SV)?
- A. BCWP - BCWS = 105.000 - 100.000 =- 5,000
- B. ACWP - BCWS = 110.000 - 100,000 = 10,000
- C. BCWS - BCWP = 100.000 - 105,000 = -5,000
- D. BCWS -ACWP = 100.000 - 110,000 - -10,000
Answer: A
Explanation:
Schedule Variance (SV) is another EVM metric that measures the difference between the work performed and the work scheduled.
Key Points:
SV Formula:
SV = BCWP - BCWS
BCWP = 105,000 work hours
BCWS = 100,000 work hours
Calculation:
SV = 105,000 - 100,000 = 5,000 work hours
Interpretation:
A positive SV indicates that the project is ahead of schedule, as more work has been performed than was planned.
Conclusion: The correct answer is D. BCWP - BCWS = 105,000 - 100,000 = 5,000 because this calculation accurately reflects the schedule variance of the project.
NEW QUESTION # 105
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.
How many years will it take to earn $400 in interest on $800 at 4% compounded annually?
- A. 11 years
- B. 13 years
- C. 10 years
- D. 12 years
Answer: D
Explanation:
To calculate how many years it will take to earn $400 in interest on $800 at 4% compounded annually, we need to solve for nnn in the future value formula:
FV=PV×(1+i)nFV = PV \times (1 + i)^nFV=PV×(1+i)n
Where:
FVFVFV is the future value ($1,200 = $800 + $400)
PVPVPV is the present value ($800)
iii is the interest rate (4% or 0.04)
nnn is the number of years
1,200=800×(1.04)n1,200 = 800 \times (1.04)^n1,200=800×(1.04)n
Dividing both sides by 800:
1.5=(1.04)n1.5 = (1.04)^n1.5=(1.04)n
Taking the logarithm of both sides:
log(1.5)=n×log(1.04)\log(1.5) = n \times \log(1.04)log(1.5)=n×log(1.04) n=log(1.5)log(1.04)≈12n = \frac{\log(1.5)}{\log(1.04)} \approx 12n=log(1.04)log(1.5)≈12
NEW QUESTION # 106
A used concrete pumping truck can be purchased for $125,000. The operation costs are expected to be $65,000 the first year and increase 5% each year thereafter. As a result of the purchase, the company will see an increase in income of $100,000 the first year and 5% more each subsequent year. The company uses straight-line depreciation. The truck will have a useful life of five (5) years and no salvage value. Management would like to see a 10% return on any investment. The company's tax rate is 28%.
Student will receive scholarship when the GPA is within top 2%. The mean GPA is 2.8 and standard deviation is 0.5.
How high must the GPA be to qualify for the scholarship?
- A. 3.83
- B. 3.91
- C. 3.62
- D. 3.35
Answer: C
Explanation:
To find the GPA that qualifies for the top 2%, we use the inverse of the standard normal distribution (Z-table). The Z-score corresponding to the top 2% is approximately 2.05. Given the mean GPA is 2.8 with a standard deviation of 0.5, we calculate the threshold GPA as follows:
GPA=μ+Z×σ=2.8+2.05×0.5=2.8+1.025=3.62\text{GPA} = \mu + Z \times \sigma = 2.8 + 2.05 \times 0.5 = 2.8 + 1.025 = 3.62GPA=μ+Z×σ=2.8+2.05×0.5=2.8+1.025=3.62 Thus, a GPA of 3.62 is needed to qualify for the scholarship.
NEW QUESTION # 107
Which of the following best describes the concept of total cost management:
- A. An integrating process that maps the fields of practice of cost engineering without linking it to project management, resource management, or accounting
- B. The practices and processes utilized to manage the total life cycle cost investment in a portfolio of strategic assets
- C. A job cost system for ensuring all aspects of a particular manufacturing process are accumulated completely
- D. A method of quantifying construction damages where the total job costs are subtracted from the original bid or estimate to determine the total cost amount for a claim
Answer: B
Explanation:
Total Cost Management (TCM) is a holistic approach that involves the application of practices and processes to manage the total life cycle costs of a portfolio of strategic assets. This concept extends beyond individual project management to encompass the entire investment life cycle, from initial planning and design through to operation, maintenance, and eventual decommissioning or replacement of assets. TCM aims to optimize the total cost of ownership and ensure that resources are allocated efficiently over the long term.
Option A refers to a specific method for quantifying construction damages, not the broad concept of TCM.
Option C describes a job cost system, which is a narrower focus than TCM.
Option D incorrectly states that TCM does not link to project management, resource management, or accounting, which are integral to TCM.
Therefore, B is the correct answer as it best describes the comprehensive and life cycle-oriented nature of Total Cost Management.
NEW QUESTION # 108 
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.
10,278 hours have been expended to date. The CPI at this point in time is 0.93. SPI is
1.03. How many hours were planned?
- A. 10,586
- B. 9,559
- C. 9,280
- D. 10,278
Answer: A
NEW QUESTION # 109
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.
How much money should be set aside today to have $20,000 available eight (8) years from now if the interest rate is 6% compounded annually?
- A. $29,600
- B. $31,875
- C. $13,515
- D. $12,550
Answer: D
NEW QUESTION # 110
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.
When analyzing a precedence diagram schedule, the "backward pass"
- A. Allows activities to finish as soon as all their 'predecessor' relationships are satisfied
- B. Determines the duration of each activity
- C. Allows total float to be calculated
- D. Calculates the earliest allowable start and finish times for the activities in the schedule
Answer: D
NEW QUESTION # 111
A bond that guarantees the bidder will enter into a contract on the basis of his/her bid is referred to as:
- A. Bid bond
- B. Performance bond
- C. Surety bond
- D. Liability bond
Answer: A
Explanation:
A bid bond is a type of surety bond that guarantees the bidder will enter into a contract on the basis of their bid if they are awarded the contract. The purpose of a bid bond is to provide a financial guarantee to the project owner that the bidder will honor their bid and execute the contract at the bid price. If the bidder fails to do so, the bid bond compensates the owner for the difference between the bidder's price and the next lowest bid.
Option A: Surety bond is a broader category of bonds that includes bid bonds but is not specific to the bid guarantee.
Option B: Performance bond guarantees the completion of the project according to the contract terms but is issued after the bid is accepted.
Option D: Liability bond is related to covering legal liabilities, not bidding.
Thus, C. Bid bond is the correct answer as it specifically refers to the guarantee provided during the bidding process.
NEW QUESTION # 112
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.
The following question requires your selection of CCC/CCE Scenario 17 (4.2.50.1.1) from the right side of your split screen, using the drop down menu, to reference during your response/choice of responses.
Annual estimated tax would be:
- A. $5,565
- B. $11,925
- C. $10,500
- D. $3,869
Answer: D
Explanation:
To calculate the taxable income:
Annual income: $22,500
Annual expenditures: $12,000
Depreciation: $3,200
Taxable Income: 22,500-12,000-3,200=7,30022,500 - 12,000 - 3,200 = 7,30022,500-12,000-3,200=7,300 Tax Rate: 53% Estimated Annual Tax: 7,300×0.53=3,8697,300 \times 0.53 = 3,8697,300×0.53=3,869
NEW QUESTION # 113 
The following question requires your selection of CCC/CCE Scenario 4 (2.7.50.1.1) from the right side of your split screen, using the drop down menu, to reference during your response/choice of responses.
What is the cost of manufacturing labor for the piece of equipment today?
- A. $105,000
- B. $875,000
- C. $210,000
- D. $140,000
Answer: D
NEW QUESTION # 114
A contract clause that provides the owner with the right to terminate the contract irrespective of the general contractor's liability is:
- A. Termination of contract - convenience
- B. Breach of contract
- C. Substantial completion
- D. Termination of contract - default
Answer: A
NEW QUESTION # 115 
The following question requires your selection of CCC/CCE Scenario 4 (2.7.50.1.1) from the right side of your split screen, using the drop down menu, to reference during your response/choice of responses.
If steel costs $1800/ton at the end of Year 3, what is the price of steel at the end of Year 4?
- A. $1890/ton
- B. $1948/ton
- C. $1863/ton
- D. $1836/ton
Answer: D
NEW QUESTION # 116
Cost performance index (CPI) is defined by AACE International as: (assume no change in budgeted quantities)
- A. ACWP/BCWP
- B. ACWP/BCWS
- C. BCWP/ACWP
- D. BCWS/BCWP
Answer: C
NEW QUESTION # 117
An owner advertised his villa for sale. An investor worked out an estimate on the basis mat the villa could be rented out for $1000 per month. Maintenance charges and other taxes are estimated to be $1,500 per year. The tenant has to pay all utility charges. The investor thinks that he can sell this villa for S100.000 alter 6 years. Assuming that the minimum acceptable rate of return is 12%. answer the following question.
The villa could be recommended for purchase at all of the below-mentioned prices except:
- A. $94,500
- B. $90,5000
- C. $92.800
- D. $93,500
Answer: A
Explanation:
To determine whether the villa is a good investment, we need to calculate the net present value (NPV) of the cash flows. We can discount the future cash flows (rental income minus maintenance costs) and the sale price of the villa back to the present value using the investor's required rate of return of 12%. The villa can be recommended for purchase if its NPV is positive, except for the case where the purchase price is $94,500, which yields a negative NPV.
NEW QUESTION # 118 
The following question requires your selection of CCC/CCE Scenario 4 (2.7.50.1.1) from the right side of your split screen, using the drop down menu, to reference during your response/choice of responses.
At the end of Year 3, steel prices will have increased by what percentage over today's price? (round to 1 decimal)
- A. 8.2%
- B. 8.7%
- C. 4.6%
- D. 8.0%
Answer: D
NEW QUESTION # 119
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.
Which of the following methods a used for creating critical path schedules:
- A. Precedence and arrow diagram methods only
- B. Gantt chart (bar chart) method
- C. Precedence diagram method
- D. Arrow diagram method
Answer: A
NEW QUESTION # 120
Which of the following is NOT a part of the five (5) phases of value engineering?
- A. Information gathering
- B. Creative
- C. Functional analysis
- D. Cost reduction
Answer: D
Explanation:
Cost reduction is not a specific phase in the value engineering process. The five phases of value engineering are:
Information gathering: Collecting relevant data.
Creative: Brainstorming ideas for potential improvements.
Evaluation: Assessing the feasibility and impact of ideas.
Development: Refining the selected ideas into actionable solutions.
Presentation: Proposing the best solution to stakeholders.
While cost reduction is an overall goal of value engineering, it is not a distinct phase in the process.
NEW QUESTION # 121
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?
- A. Changes to the project execution plan
- B. Peripherals report
- C. Current trends of time and money
- D. Usage of contingency
Answer: B
Explanation:
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.
NEW QUESTION # 122
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.
The following question requires your selection of CCC/CCE Scenario 26 (2.5.50.1.2) from the right side of your split screen, using the drop down menu, to reference during your response/choice of responses.
What information is needed to develop a Class 2 definitive estimate?
- A. Preliminary quantities with labor, material, and factors applied, square footage of facilities, minimum contingency detailed indirect costs
- B. Square footage of facilities, factored indirects and home office costs
- C. Soil data, detailed construction drawings, quantity takeoffs, minimum contingency detailed indirect costs, detailed engineering estimates
- D. Vendor quotes, home office detailed estimate, preliminary quantities with labor, material, and factors applied
Answer: C
Explanation:
Given Scenario:
A major theme park is in the preliminary stages of construction, requiring detailed estimation for costs involving new technology.
Steps:
Identify what information is needed for a Class 2 definitive estimate.
Class 2 estimates are more detailed and require specific data, including soil data, detailed construction drawings, and quantity takeoffs.
Answe r: A. Soil data, detailed construction drawings, quantity takeoffs, minimum
NEW QUESTION # 123
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