CCP AACE International Certified Cost Professional (CCP) Exam Free Practice Exam Questions (2025 Updated)

To determine how much the contractor needs to invest at the end of each year to accumulate $250,000 in 10 years, we use the sinking fund factor formula:

A=F×(i(1+i)n−1)A = F \times \left(\frac{i}{(1+i)^n-1}\right)A=F×((1+i)n−1i​)

Where:

AAA is the annual payment

FFF is the future amount ($250,000)

iii is the interest rate per period (10% or 0.10)

nnn is the number of periods (10 years)

Plugging in the values:

A=250,000×(0.10(1+0.10)10−1)≈12,550A = 250,000 \times \left(\frac{0.10}{(1+0.10)^{10}-1}\right) \approx 12,550A=250,000×((1+0.10)10−10.10​)≈12,550

So, the correct answer isB. $12,550.

In a fixed-price/lump-sum contract, the agreed price is fixed and generally not subject to adjustment based on fluctuations in costs, unless explicitly stated in the contract terms. Payment for adjustments in construction costs due to fluctuations in resource prices or delays is typically not allowed unless there is a specific provision for such adjustments, which is rare in fixed-price contracts. Therefore, the correct answer is C. In no situation.

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Abreach of contractoccurs when one party fails to fulfill its obligations as specified in the contract. For a breach to be legally recognized, certain conditions must be met:

Key Points:

Contrary to Intent (Item 1):

The breach must contradict the original intent and understanding between the parties when they entered into the contract.

Contrary to Terms and Conditions (Item 2):

The breach must violate specific terms and conditions outlined in the contract.

Excess Costs (Item 3):

While sustaining excess costs can be a consequence of a breach, it is not a necessary condition to prove a breach has occurred. The breach itself is sufficient if it violates the contract's terms or the intent of the agreement.

Conclusion:The correct answer isD. Items 1 and 2because these are the necessary and sufficient conditions to establish a breach of contract.

Estimate at Completion (EAC)is a forecasting tool in EVM that predicts the total cost of the project at completion based on current performance.

Key Points:

EAC Formula:

One common method to calculate EAC is:

EAC = ACWP + (BAC - BCWP)

Where:

ACWP is the Actual Cost of Work Performed,

BAC is the Budget at Completion,

BCWP is the Budgeted Cost of Work Performed.

Explanation:

This formula assumes that the remaining work will be performed at the budgeted rate (i.e., future work will follow the planned performance), and it adjusts the total estimate by adding the cost of the remaining work to the actual costs incurred so far.

Conclusion:The correct answer isD. ACWP + (BAC - BCWP)because this method provides a reliable estimate for the total project cost at completion, considering current performance.

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 isB. $137,466.

The median cost is found by ordering the unit costs and selecting the middle value. The ordered costs are:

$26.78, $34.50, $37.30, $40.00, $46.59, $55.00, $55.00, $65.00, $75.00

Since there are nine data points, the fifth value in this list is the median:

C. $40.00is the median unit cost.

Quality management encompasses several critical aspects that ensure a project's outputs meet the required standards and fulfill the client's needs. These aspects typically include:

Quality Assurance (QA):This refers to the systematic processes and procedures put in place to ensure that the project's outcomes meet the required quality standards. QA is proactive, focusing on preventing defects by improving processes.

Quality Planning:This involves identifying the quality standards relevant to the project and planning how to meet those standards. It is an essential early step in the project management process, ensuring that quality objectives are defined and documented.

Quality Control (QC):This is the process of monitoring specific project results to determine if they comply with relevant quality standards. QC is a reactive process that identifies and corrects defects in the final outputs.

Quality Checkingis not a standard term in the context of formal quality management processes. While checking may occur during quality control or assurance activities, it is not recognized as a distinct, formal component of quality management, making it the correct answer as the aspect that does not belong to the set.

In Rensis Likert’s management system model, theexploitative-authoritativemanagement style is characterized by a highly centralized decision-making process wheremanagement makes most decisions and passes them downto subordinates with little or no input from employees. This style typically involves strict control and limited trust in the workforce, often leading to low employee morale and motivation.

Passive listeningoccurs when a person hears the words being said but does not fully process or receive the message behind those words. This type of listening involves a lack of engagement with the speaker and often results in missing key points or failing to understand the intended message. In contrast to active listening, where the listener actively engages with the speaker's words and tries to understand the meaning, passive listening is superficial and often ineffective in communication.

Aperipherals reportis not typically considered part of a project cost and schedule forecast. Forecasts generally focus onusage of contingency,current trends of time and money, andchanges 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 isC. Peripherals report.

To determine the taxes due at the end of year five, we calculate the income before taxes, subtract the depreciation, and then apply the tax rate of 28%.

Year 5 Income:

Year 1 Income = $100,000

Each subsequent year increases by 5%, so Year 5 Income = $100,000 × (1.05)^4 = $121,550.63

Year 5 Operating Costs:

Year 1 Operating Costs = $65,000

Each subsequent year increases by 5%, so Year 5 Operating Costs = $65,000 × (1.05)^4 = $78,943.41

Depreciation (Straight-Line):

Depreciation = $125,000 ÷ 5 = $25,000 per year

Income Before Taxes (Year 5):

Income Before Taxes=121,550.63−78,943.41−25,000=17,607.22\text{Income Before Taxes} = 121,550.63 - 78,943.41 - 25,000 = 17,607.22Income Before Taxes=121,550.63−78,943.41−25,000=17,607.22

Taxes Due:

Taxes Due=17,607.22×0.28=4,930.02\text{Taxes Due} = 17,607.22 \times 0.28 = 4,930.02Taxes Due=17,607.22×0.28=

When comparing two alternatives with different useful lives, the most appropriate method is to use theEquivalent Uniform Annual Value (EUAV). This method converts the net present worth (NPW) or the total cost of each alternative into an equivalent uniform annual cost or value over their respectivelives. By converting the costs into a common annual value, it allows for a straightforward comparison between alternatives with differing lifespans, ensuring that all costs (including maintenance, operation, and initial costs) are considered over a consistent time period.

Aconstructability reviewinvolves a multi-disciplinary team evaluating the methods used to deliver the project's scope, with the goal of improving efficiency, reducing risks, and minimizing costs. This review goes beyond just scheduling or cost analysis; it looks at the entire process to ensure the project can be built as intended. Thus, the correct answer isB. The review by a multi-discipline team to improve the methods of delivering the intended scope.

In aLump-Sum/Fixed-Price contract, the contractor agrees to complete the work for a set price, regardless of the actual costs incurred. This type of contract is often used when the project scope is well-defined, and the contractor has the freedom to choose methods and resources to complete the work within the agreed price.

Key Points:

Lump-Sum/Fixed-Price Contract:

The contractor has full responsibility for carrying out the project within the agreed-upon price.

The contractor is incentivized to control costs and manage resources efficiently because any cost overruns will reduce their profit margin.

Other Contract Types:

Guaranteed Maximum Price (GMP):The contractor is reimbursed for costs up to a maximum limit. Any costs above this limit are the contractor's responsibility.

Cost Reimbursable/Fixed Fee:The contractor is reimbursed for actual costs incurred, plus an additional fee, which might be a fixed amount or a percentage of the costs.

Measured Unit Price:Payment is made based on the actual quantity of work completed, with predefined rates for each unit.

Conclusion:The correct answer isD. Lump-sum/Fixed priceas this contract type gives the contractor the freedom to choose their methods and resources to complete the project, with a focus on efficiency to maximize profit within the fixed price.

Atarget contractis a form of contract where both the owner and contractor agree on a target cost, and both parties share any cost savings or overruns. This contract type encourages efficiency but has some drawbacks.

Key Points:

Disadvantages of Target Contracts:

No Competitive Bidding for Targets:The target cost is typically negotiated rather than competitively bid, which could lead to less competitive pricing.

Other Points:While target contracts encourage timely and economical completion and allow for early start and flexibility, the lack of competitive bidding for the targets can be a significant disadvantage.

Conclusion:The correct answer isB. No opportunity to competitively bid the targetsbecause this is a specific disadvantage associated with target contracts.

Anagentis 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.

In project management, the relationship that defines a situation where one activity can partially start as another activity starts is known asStart to Start. This type of dependency is used when two activities need to begin at the same time or when one activity can start before the other finishes but cannot finish before the first activity starts.

In afixed price contract, the contractor agrees to deliver the project at a set price, regardless of the actual costs incurred. This means that the contractor assumes all the performance risk, as any cost overruns must be absorbed by the contractor. If the project costs more than the fixed price agreed upon, the contractor cannot charge the owner more. Conversely, if the project is completed under budget, the contractor benefits by retaining the difference.

Asset performance measurement refers to the systematic process of evaluating and reporting the non-monetary functions or performance of a strategic asset portfolio. This includes assessing factors such as utilization, efficiency, condition, and other qualitative aspects that contribute to the strategic value of the asset portfolio. These measures are critical for informed decision-making regarding asset management and optimization, aligning with long-term strategic goals.