According to the AACE International Recommended Practice 18R-97, which estimate class represents the lowest level of project definition (typically 0%–2% complete) and is used for concept screening?
Cost Estimating
Question · Easy
The longest way home
Short
In total cost management, which cost category includes labor, materials, equipment, and subcontracts that are incurred directly by the project work activities?
Sum of time-phased costs at any work breakdown level; subtracting the EAC from it gives the VAC.
Managing project costs
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Chapter 1: Introduction & Total Cost Management (TCM) Framework
1.1 AACE CCP Exam Structure, Eligibility & the In-Exam Memo
Study guide
Contingency, as defined by AACE, is intended to cover which of the following?
Question · Medium
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Game
Which estimating method develops cost by aggregating the cost of each individual component, work package, or activity from the bottom up?
Forecast of an activity's total final cost, which is subtracted from the BAC to give the VAC.
An owner asks for a Class 3 estimate. According to AACE 18R-97, what level of project definition is typically required, and what is the primary use?
Would you rather: money now or later
A future cash flow of $100,000 is to be received in 5 years. At an annual discount rate of 8%, what is its present value (rounded)?
Cost Engineering Economics
Planned allocation of resources, often split into material quantities and labor hours times their rates.
1.2 The Total Cost Management (TCM) Framework & PDCA Cycle
An asset costs $50,000 with a salvage value of $5,000 after a 5-year useful life. Using straight-line depreciation, what is the annual depreciation expense?
Swap tiles to line up three of the same term.
Term Match
A project has cash flows of -$100,000 at year 0, +$40,000 at years 1, 2, and 3. At a discount rate of 10%, what is the project's NPV (rounded)?
Written documentation that describes how an estimate, schedule, or plan was developed, including its assumptions and exclusions.
Which depreciation method records higher expense in early years and lower expense in later years by applying a fixed rate (typically 200%) to the declining book value, ignoring salvage value until the book value approaches it?
Under the U.S. Modified Accelerated Cost Recovery System (MACRS), which recovery period applies to most computers and office machinery?
Alteration to a project's scope of work or service.
1.3 Strategic Asset Management vs. Project Control Processes
A project shows the following at month 6: Planned Value (PV) = $200,000, Earned Value (EV) = $180,000, Actual Cost (AC) = $210,000. What is the Cost Performance Index (CPI)?
Project Cost Management
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Term Pairs
Using the same data (PV = $200,000, EV = $180,000, AC = $210,000) with a Budget at Completion (BAC) of $1,000,000, what is the Estimate at Completion (EAC) assuming current CPI continues?
Kind of flow that records funds entering and leaving a project over time.
What does a To-Complete Performance Index (TCPI) of 1.20 indicate?
Within the AACE Total Cost Management (TCM) framework, which two main process areas are integrated to manage strategic and project asset lifecycle costs?
Total Cost Management Overview
Amount of money asked or given for a product.
Chapter 2: Cost Estimating Fundamentals & Classification
2.1 AACE Recommended Practice 18R-97 Estimate Classification System
In a fixed-price incentive fee (FPIF) contract, which mechanism is used to share cost variance between buyer and seller below the ceiling price?
Procurement
Find five hidden terms in a grid of letters.
Term Search
Cost of quality (COQ) is typically classified into four categories. Which category includes the cost of inspections, audits, and testing performed to detect defects before delivery?
Quality Management
Discipline that applies professional and technical expertise to plan and control resources, profitability, and uncertainty across an asset's full life cycle.
Interface with other disciplines
On a 90% learning curve, if the first unit takes 100 labor-hours, approximately how many labor-hours will the second unit require?
Resource Management
Which document, prepared during project initiation, formally authorizes the project, identifies the sponsor, and grants the project manager authority to apply organizational resources?
Project Management Process
Everything that will be invested in and delivered by an activity or project, taken as a whole.
2.2 Direct vs. Indirect Costs and Cost Element Breakdown
What is the primary output of qualitative risk analysis?
Risk Management
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In critical path method (CPM) scheduling, the difference between an activity's late start and early start is called:
Project Planning And Scheduling
To submit a price for services, usually as a proposition to do work and supply materials or equipment.
Inflation adjustments in engineering economics typically distinguish between which two types of interest rates?
A company is evaluating a project with after-tax cash flows. The marginal tax rate is 25%, and pre-tax operating profit (revenue − operating costs) is $200,000 with depreciation of $40,000. What is the after-tax cash flow?
Question · Hard
Formal request or assertion of a right by one contracting party against the other for losses suffered under the agreement.
2.3 Quantity Takeoff, Standard Cost Databases & Pricing Sources
Which deliverable in the project planning process formally hierarchically decomposes the total project scope into smaller, more manageable work packages?
Monte Carlo simulation in cost risk analysis primarily produces which of the following?
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