Certified Cost Professional (CCP) CCP Exam Questions

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Question #6 (Topic: Demo Questions)

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%.
The value of the truck at the end of year five (5) would be:

$0

$14,265

$25,000

$23,366

Correct Answer: A

Explanation:

Since the truck is being depreciated using the straight-line method over five years with no salvage value, the book value of the truck at the end of the five-year useful life will be $0 . This means the entire cost of the truck would have been fully depreciated by the end of the five years.

Question #7 (Topic: Demo Questions)

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 class of estimate is used for the preliminary design phase of a project?

Class 5 - order of magnitude estimate with +50% / -30% accuracy

Class 1 - order of magnitude with +30% / -30% accuracy

Class 4 - budget estimate with +30% / -15% accuracy

Class 2 - definitive estimate with +15%/-5% accuracy

Correct Answer: A

Explanation:

The design phase is in the preliminary stages and involves new ride technology with no historical data available.
Steps:
Determine which class of estimate is used in this context.
A Class 5 estimate, which is an order of magnitude estimate with +50%/-30% accuracy, is typically used for projects in the early design or concept stages where detailed data is unavailable.

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