Most Recent AACE International CCP Exam Questions & Answers

In a construction company, profitability analysis typically involves calculating the Return on Investment (ROI) and Rate of Return (ROR). ROI measures the profitability of an investment by comparing the gain from the investment to its cost, while ROR calculates the percentage return on each dollar invested. These metrics are critical in determining the financial performance and efficiency of investments in the construction industry.

To calculate the total percentage increase in steel prices over three years, we compound the inflation rates for each year:

Year 1: 2.5%

Year 2: 2.5%

Year 3: 3.0%

The formula to calculate the total percentage increase is:

TotalIncrease=(1+RateYear1)(1+RateYear2)(1+RateYear3)1\text{Total Increase} = (1 + \text{Rate Year 1}) \times (1 + \text{Rate Year 2}) \times (1 + \text{Rate Year 3}) - 1TotalIncrease=(1+RateYear1)(1+RateYear2)(1+RateYear3)1 TotalIncrease=(1+0.025)(1+0.025)(1+0.03)1\text{Total Increase} = (1 + 0.025) \times (1 + 0.025) \times (1 + 0.03) - 1TotalIncrease=(1+0.025)(1+0.025)(1+0.03)1 \text{Total Increase} = 1.025 \times 1.025 \times 1.03 - 1 \approx 1.082 - 1 = 0.082 \text{ or 8.2%}

So, the correct answer is B. 8.2%.

In project management, the Critical Path Method (CPM) is used to determine the longest path of planned activities to the end of the project. This path determines the shortest possible duration to complete the project. The longest path in CPM is defined by the sequence of activities that have zero float (slack) and must be completed on time to avoid delaying the project.

Key Points:

Milestone Activities:

Milestones are significant points or events in the project timeline, representing the completion of a major phase or segment of the project.

They do not consume time or resources themselves and do not have a duration, so they do not contribute to the calculation of the longest path. Instead, they are used as reference points to mark significant events or deadlines within the project.

Activities with Lag:

Lags are intentional delays between activities, and while they can influence the start and finish of subsequent tasks, they do contribute to the determination of the longest path if those activities are on the critical path.

Activities with Short Durations:

Activities with short durations may still be on the critical path, as they can be linked sequentially to other critical tasks, thereby affecting the overall project duration.

Constraints, Resource Leveling, and Interruptible Activities:

These factors can affect the timing of activities and may extend or compress the critical path depending on the specific resource and scheduling constraints.

Conclusion: The correct answer is A. Milestone activities because these activities, being non-duration tasks, do not contribute to the calculation of the longest path. The focus should be on the tasks that consume time and resources and are interlinked in a way that affects the project's completion date.

Given Scenario:

You need to calculate the book value (BV) of the asset at the end of 5 years using straight-line depreciation.

The straight-line depreciation formula is: AnnualDepreciation=CostSalvageValueUsefulLife\text{Annual Depreciation} = \frac{\text{Cost} - \text{Salvage Value}}{\text{Useful Life}}AnnualDepreciation=UsefulLifeCostSalvageValue

Initial Cost: $80,000

Salvage Value: $0 (since there's no salvage value)

Useful Life: 25 years

Annual Depreciation: 80,00025=3,200\frac{80,000}{25} = 3,2002580,000=3,200 per year

Book Value after 5 years:

BookValue=Cost(5AnnualDepreciation)=80,000(53,200)=80,00016,000=64,000\text{Book Value} = \text{Cost} - (5 \times \text{Annual Depreciation}) = 80,000 - (5 \times 3,200) = 80,000 - 16,000 = 64,000BookValue=Cost(5AnnualDepreciation)=80,000(53,200)=80,00016,000=64,000

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.