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Prepare for the AACE International Certified Cost Professional (CCP) Exam exam with our extensive collection of questions and answers. These practice Q&A are updated according to the latest syllabus, providing you with the tools needed to review and test your knowledge.
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The questions for CCP were last updated on Nov 17, 2024.
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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 $100,000 is needed to purchase a piece of equipment 3 years from now, how much money needs to be invested today assuming a 10% rate of return (rounded to the nearest thousand)?
To determine how much money needs to be invested today to reach $100,000 in 3 years with a 10% rate of return, you use the present value formula:
PV=FV(1+i)nPV = \frac{FV}{(1 + i)^n}PV=(1+i)nFV
Where:
PVPVPV is the present value
FVFVFV is the future value ($100,000)
iii is the interest rate (10% or 0.10)
nnn is the number of periods (3 years)
PV=100,000(1+0.10)3=100,0001.33175,131PV = \frac{100,000}{(1 + 0.10)^3} = \frac{100,000}{1.331} \approx 75,131PV=(1+0.10)3100,000=1.331100,00075,131
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?
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
You are reporting the following Earned Value Analysis information for the project:
EV= $1,500,000
AC=$1.000,000
PV= $2,000,000
What is the status of the project?
The problem provides key metrics used in Earned Value Management (EVM):
Earned Value (EV): $1,500,000
Actual Cost (AC): $1,000,000
Planned Value (PV): $2,000,000
Key Points:
Schedule Performance Index (SPI):
SPI = EV / PV = $1,500,000 / $2,000,000 = 0.75
An SPI less than 1 indicates the project is behind schedule.
Cost Performance Index (CPI):
CPI = EV / AC = $1,500,000 / $1,000,000 = 1.5
A CPI greater than 1 indicates the project is under budget.
Conclusion: The correct answer is C. Project is behind schedule, but under budget because the SPI indicates a delay in schedule, and the CPI shows that the project is currently spending less than planned.
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 you buy a lot for $3,000 and sell it for $6,000 at the end of 8 years, what is your annual rate of return?
To calculate the annual rate of return on the investment, you can use the formula for the compound annual growth rate (CAGR):
CAGR=(FVPV)1n1\text{CAGR} = \left(\frac{FV}{PV}\right)^{\frac{1}{n}} - 1CAGR=(PVFV)n11
Where:
FVFVFV is the future value ($6,000)
PVPVPV is the present value ($3,000)
nnn is the number of years (8 years)
CAGR=(60003000)181(2)1810.091or9.1%\text{CAGR} = \left(\frac{6000}{3000}\right)^{\frac{1}{8}} - 1 \approx (2)^{\frac{1}{8}} - 1 \approx 0.091 or 9.1\%CAGR=(30006000)811(2)8110.091or9.1%
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 mothed that has a compound amount factor and a present worth factor. There is the uniform annual series that has a sinking fund factor, capita1 recovery factor and also the compound amount factor and present worth factor. At this point, we can assume money is worth 10%.
Which of the following is not one of the requirements to form a contract?
Consideration: Each party must bring something of value to the agreement.
Competent Parties: The parties involved must be legally able to contract.
Legality of Purpose: The purpose of the contract must be lawful.
An 'Agent' is not a requirement for forming a contract. An agent may act on behalf of one party, but their existence or role is not a requisite for a valid contract. Thus, the correct answer is D. Agent.
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