AACE Certified Cost Professional CCP-AACE Dumps in PDF

Free AACE CCP-AACE Real Questions (page: 13)

The discount rate is a measure used to convert cash flow streams occurring to different points in time to a common base called the net present worth.
What is the discount rate based upon?

  1. The interest rate which client will have to pay on his loan
  2. Bank rate
  3. Inflation and interest rates
  4. The rate of inflation

Answer(s): C

Explanation:

The discount rate reflects the time value of money and is based on both interest rates and inflation, capturing the combined effect of the cost of capital and the loss of purchasing power over time when converting future cash flows to present worth.



An owner advertised his villa for sale. An investor worked out an estimate on the basis that 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 utility charges. The investor thinks that he can sell this villa for $100,000 after 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:

  1. $93,500
  2. $92,800
  3. $94,500
  4. $90,5000

Answer(s): C

Explanation:

The net annual income from the villa is calculated by subtracting annual maintenance and taxes from rental income. This net cash flow is discounted over six years at the minimum acceptable rate of return to determine its present value, and the expected resale value is also discounted to present value. The sum of these present values represents the maximum price the investor should be willing to pay. Any purchase price above this value would not meet the required return, making that option unacceptable.



The following question requires your selection of Scenario 1.2.104 from the right side of your split screen, using the drop down menu, to reference during your response/choice of response.
An estimate must be prepared to design and build a 200 ton per day (TPD) waste to energy plant. The plant will be located at Site B and is to be completed by the end of Year 6. A similar plant with a capacity of 150 TPD was completed at Site A in December 1999.
Escalation rates for water to energy plants are forecasted as:

Plants at Site B are estimated to cost 10% more than plants at Site A due to site conditions. Historical data indicates a cost/capacity factor of .75 for waste to energy plants.
How can the quality of a cost/capacity factor estimate be improved?

  1. Verify the equipment costs used in the estimate
  2. Verify the labor rates used in the estimate
  3. Validate labor productivity from recently completed projects
  4. Validate the capacity factor from similar, recently completed projects

Answer(s): D

Explanation:

The accuracy of a cost/capacity factor estimate depends primarily on how well the exponent reflects real cost behavior for similar facilities. Validating the capacity factor using data from comparable, recently completed projects ensures that the scaling relationship between cost and capacity is appropriate and improves the reliability of the estimate.



AACE International defines _______________ as the primary activity that separates Value Methodology (VM) from other “improvement” practices and has the objective to develop the most beneficial areas for continuing study.

  1. Benefit/Cost ratio (B/C) method
  2. Function Analysis Phase
  3. Life cycle costs method (LCC)
  4. Net present worth method

Answer(s): B

Explanation:

The Function Analysis Phase is the core activity that distinguishes Value Methodology from other improvement practices, as it systematically identifies and analyzes functions to determine where the greatest value improvement opportunities exist for further study.



Which statement best describes the constructability review for a project?

  1. The systematic application of recognized techniques which identify the functions of the product or service
  2. It concerned primarily with resource scheduling or organizational planning
  3. A method to reduce costs by considering alternate designs
  4. The review by a multi-discipline team to improve the methods of delivering the intended scope

Answer(s): D

Explanation:

A constructability review involves a multidisciplinary team evaluating a project during planning and design to improve how the intended scope is executed, with the goal of enhancing constructability, efficiency, and overall project delivery.



A task has an early start of day 4, late start of day 14, early finish of day 10, and a late finish of day 20.
What is the task’s float?

  1. 4
  2. 10
  3. 9
  4. 20

Answer(s): B

Explanation:

Task float is calculated as the difference between late start and early start, or equivalently between late finish and early finish. Using the given data, the available float is the difference between the late and early dates, which equals 10 days.



Develop a CPM method considering the below tasks and logical relationships. Use this information to answer the related questions.

What is the late finish date of activity 50?

  1. Day 47
  2. Day 38
  3. Day 28
  4. Day 37

Answer(s): A

Explanation:

The project’s controlling finish is driven by activity 70. Working backward from the project completion, activity 70’s late start sets the latest allowable completion of its predecessors. Since activity 50 is an immediate predecessor of activity 70, its late finish must align with activity 70’s late start, which is Day 47.



The longest path depends upon relationships driving the timing of activity starts, therefore the following scheduling features should not be used in calculating the longest path.

  1. milestone activities
  2. activities with short durations
  3. activities with lag
  4. constraints, resource leveling, and interruptible activities

Answer(s): D

Explanation:

The longest path method focuses strictly on logical relationships and activity durations that drive start and finish timing. Constraints, resource leveling, and interruptible activities artificially alter schedule dates and can mask the true logic-driven longest path, so they should be excluded when determining it.



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