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Sample Grade-1 Cost Engineer Examination Practice Questions

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1According to China's basic capital construction procedures (基本建设程序) and the engineering cost management system, which cost document is compiled during the preliminary design stage (初步设计阶段) to determine the overall investment control target for a project?

A.Investment Estimate (投资估算)

B.Preliminary Design Budgetary Estimate (设计概算)

C.Working Drawing Budget (施工图预算)

D.Engineering Completion Settlement (工程竣工结算)

Explanation: In China's statutory capital construction procedures, the Preliminary Design Budgetary Estimate (设计概算) is compiled during the preliminary design phase based on preliminary drawings, budgetary estimate quotas (概算定额) or cost indicators. Once approved by the competent authority, the design budgetary estimate serves as the highest statutory investment ceiling for the project, which subsequent working drawing budgets and contract prices cannot exceed without formal government re-approval.

2According to the State Council Regulations on the Project Capital Fund System for Fixed Asset Investment Projects (关于固定资产投资项目试行资本金制度的通知), what is the minimum statutory proportion of project capital fund (项目资本金) required for standard residential real estate development and urban infrastructure projects?

A.10%

B.20%

C.35%

D.50%

Explanation: Under the State Council's regulations on the project capital fund system for fixed asset investments (国发[2015]51号 and subsequent revisions), affordable housing and standard commodity residential development require a minimum project capital fund proportion of 20%, while urban rail transit and general infrastructure projects also baseline at 20% (with certain priority infrastructure eligible for 15% under special macroeconomic stimulus).

3A construction enterprise borrows RMB 10,000,000 from a commercial bank with a nominal annual interest rate (名义利率) of 6%, compounded quarterly. What is the effective annual interest rate (有效年利率 / 实际年利率) for this financing arrangement?

A.6.00%

B.6.14%

C.6.23%

D.6.36%

Explanation: The effective annual interest rate is calculated using the compound interest formula: $i_{eff} = (1 + r/m)^m - 1$, where $r = 6\%$ and the compounding frequency per year $m = 4$ (quarterly). Therefore: $i_{eff} = (1 + 0.06/4)^4 - 1 = (1 + 0.015)^4 - 1 = (1.015)^4 - 1 = 1.06136355 - 1 \approx 6.14\%$.

4In project economic evaluation, what is the fundamental relationship between Net Present Value (NPV) and the benchmark discount rate ($i_c$), assuming standard conventional cash flows (净现金流量为常规现金流量)?

A.NPV increases monotonically as the discount rate $i_c$ increases

B.NPV decreases monotonically as the discount rate $i_c$ increases

C.NPV remains constant regardless of variations in the discount rate $i_c$

D.NPV forms a parabolic U-shaped curve with respect to the discount rate $i_c$

Explanation: For conventional cash flow investment projects (where an initial net outflow is followed solely by positive net cash inflows), the first derivative of the NPV function with respect to the discount rate $i$ is strictly negative ($d(NPV)/di < 0$). Thus, NPV is a monotonically decreasing function of $i_c$. The Internal Rate of Return (IRR) is the unique discount rate at which $NPV(IRR) = 0$.

5An engineering machinery unit was purchased for an original cost of RMB 600,000, with an estimated useful life of 5 years and a net salvage value rate (净残值率) of 4%. Using the Sum-of-the-Years'-Digits method (年数总和法), what is the depreciation expense in the second year?

A.RMB 115,200

B.RMB 153,600

C.RMB 192,000

D.RMB 230,400

Explanation: Under the Sum-of-the-Years'-Digits method: Total depreciable value = Original Cost × (1 - Net Salvage Rate) = RMB 600,000 × (1 - 0.04) = RMB 576,000. The sum of the years' digits = $1 + 2 + 3 + 4 + 5 = 15$. In Year 2, the remaining useful life at the start of the year is 4 years. Depreciation in Year 2 = $\text{Depreciable Value} \times \frac{4}{15} = 576,000 \times \frac{4}{15} = \text{RMB } 153,600$.

6Under the Double-Declining-Balance method (双倍余额递减法) for an asset with an original value of RMB 800,000, a useful life of 5 years, and an estimated salvage value of RMB 30,000, how is the annual depreciation calculated in the 4th and 5th (final two) years?

A.Continue applying the 40% depreciation rate to the remaining book value each year

B.Deduct the estimated salvage value from the net book value at the beginning of the 4th year and divide equally between the 4th and 5th years

C.Depreciate the entire remaining book value completely in the 4th year, leaving zero in the 5th year

D.Switch to the straight-line method based on the original asset value divided by 5

Explanation: Under statutory PRC accounting and cost management rules for the Double-Declining-Balance method: In the first $(N - 2)$ years, salvage value is ignored and depreciation is calculated as $NBV \times (2/N)$. In the final two years, to prevent the book value from dropping below the salvage value, the net book value at the start of the $(N-1)$th year minus the salvage value is divided equally across the remaining two years: $\text{Annual Depreciation} = (NBV_4 - \text{Salvage}) / 2$.

7According to the Bidding Law of the People's Republic of China (招标投标法) and its Implementing Regulations, what is the statutory minimum duration for the bidding period (投标有效期/招标文件发售至投标文件截止之日)?

A.Not less than 10 calendar days

B.Not less than 15 calendar days

C.Not less than 20 calendar days

D.Not less than 30 calendar days

Explanation: Article 24 of the PRC Bidding Law explicitly specifies that the tenderer must provide a reasonable period for bidders to prepare their tender documents. For statutory public tenders, the minimum time between the date of issuing the tender documents (or clarifying amendments) and the deadline for submission of bids must not be less than 20 calendar days (自招标文件开始发出之日起至投标人提交投标文件截止之日止，最短不得少于二十日).

8In Value Engineering (价值工程, VE), which method is used to evaluate whether an engineering component's functional importance matches its cost proportion, where the Value Coefficient is defined as $V = F / C$?

A.Forced Decision Method (0-1 / 0-4 scoring to determine Function Coefficient $F$) and Cost Coefficient ($C = \text{Component Cost} / \text{Total Cost}$)

B.Internal Rate of Return optimization technique

C.Critical Path Float Analysis

D.Equivalent Annual Worth minimization

Explanation: In Value Engineering, the Functional Coefficient $F_i$ is determined via function evaluation methods (e.g., Forced Decision 0-1 or 0-4 matrix scoring), and the Cost Coefficient $C_i$ is the ratio of the component's cost to the total project cost ($C_i = C_{\text{component}} / C_{\text{total}}$). The Value Coefficient is $V_i = F_i / C_i$. When $V_i < 1$, the component's cost is disproportionately high relative to its functional contribution, identifying it as a prime target for value engineering cost reduction.

9Two mutually exclusive construction technical schemes have unequal operational lifespans: Scheme A has a lifespan of 5 years with an initial investment of RMB 2,000,000 and annual operating costs of RMB 300,000; Scheme B has a lifespan of 10 years with an initial investment of RMB 3,500,000 and annual operating costs of RMB 250,000. At a benchmark discount rate of $i = 10\%$, which method is standard and most efficient for economic comparison?

A.Net Present Value (NPV) calculated directly over their respective individual lives without adjustment

B.Equivalent Uniform Annual Cost (EUAC / 年值法 / 费用年值法)

C.Static Payback Period without discounting

D.Investment Profit Rate on Total Capital

Explanation: When comparing mutually exclusive schemes with unequal lifespans, direct comparison of unadjusted NPV is invalid because of the differing analysis horizons. The Equivalent Uniform Annual Cost (EUAC / 费用年值法) converts the total present value of costs for each scheme into an annualized uniform series over its respective life cycle: $AC = PV \times (A/P, i, n)$. The scheme with the lowest EUAC is economically optimal.

10Under the Value-Added Tax (VAT / 增值税) Reform rules for the Chinese construction industry (Caishui [2016] No. 36 and MOHURD Jianbanbiao [2019] No. 19), what is the statutory output VAT rate for construction and installation services under the General Tax Method (一般计税方法)?

A.3%

B.6%

C.9%

D.13%

Explanation: Following China's VAT rate consolidation effective April 1, 2019 (MOF/STA/GAC Announcement [2019] No. 39 and MOHURD Jianbanbiao [2019] No. 19), the statutory VAT rate for construction and installation services under the General Tax Method (一般计税方法) is 9%. The contract tax amount is calculated as: $\text{Tax} = \text{Pre-tax Cost (Sub-items + Measures + Other + Statutory Fees)} \times 9\%$.

About the Grade-1 Cost Engineer Examination Exam

The Grade-1 Cost Engineer Qualification Examination (全国一级造价工程师职业资格考试) is the national professional qualification for construction cost and project economic management professionals. It is jointly administered by MOHURD, MOT, MWR, and MOHRSS across Civil & Building, Transportation, Water Resources, and Installation specialties. The 2026 examination uses the official 2025 outline and has four papers: Construction Cost Management, Construction Engineering Valuation, Construction Technology and Measurement, and Construction Cost Case Analysis. The first three are objective papers; Case Analysis is mixed objective/subjective for Civil & Building and Installation, and subjective for Transportation and Water Resources. This question bank is an English-language MCQ study adaptation, not an official translation, format simulation, or substitute for case-study practice; its valuation content follows the current GB/T 50500-2024 standard.

Assessment

Question count varies by module

Time Limit

11.5 hours total across 2 days (Paper 1: 2.5h, Paper 2: 2.5h, Paper 3: 2.5h, Paper 4: 4.0h)

Passing Score

Fixed 60% passing mark per subject (60/100 for Papers 1–3, 72/120 for Paper 4) under a 4-year rolling cycle

Exam Fee

Set locally; Shanghai 2026 charges RMB 10 registration plus RMB 50 per subject (RMB 210 for all four) (Ministry of Housing and Urban-Rural Development (MOHURD), Ministry of Transport (MOT), Ministry of Water Resources (MWR), and Ministry of Human Resources and Social Security (MOHRSS))

Grade-1 Cost Engineer Examination Exam Content Outline

25%

Construction Cost Management (建设工程造价管理)

Legal and regulatory framework for construction projects in China (Construction Law, Bidding Law and Implementing Regulations, Civil Code Contract Provisions, Government Procurement Law); engineering cost management system and whole-process consulting; project life-cycle cost management and basic construction procedures (project proposal, feasibility study, investment estimate, preliminary design budget, working drawing budget, contract price, interim valuation, completion settlement, and final accounts); project financing and capital structure (capital fund system requirements, debt financing instruments, PPP/BOT/TOT/BOO models, weighted average cost of capital WACC); engineering economic evaluation methodologies (cash flow analysis, net present value NPV, internal rate of return IRR, dynamic and static payback periods, equivalent uniform annual cost EUAC, interest coverage ratio ICR, debt service coverage ratio DSCR, and breakeven analysis); asset depreciation methods (straight-line, sum-of-the-years'-digits, double declining balance); and construction contract taxation under China's VAT system (general tax calculation at 9% vs. simplified tax calculation at 3% per Caishui [2016] No. 36 and Jianbanbiao [2019] No. 19).

25%

Construction Engineering Valuation (建设工程计价)

Construction cost composition; quota and market price information; Bill of Quantities valuation under GB/T 50500-2024; the 12-digit BOQ coding hierarchy; tax-exclusive all-in comprehensive unit pricing; maximum tender price and bid pricing; contract price adjustment for market changes, variations, and quantity deviations; claims, interim payments, retention, and completion settlement.

25%

Construction Technology & Measurement - Civil & Building (建设工程技术与计量 - 土木建筑工程)

Civil engineering geology and structural engineering fundamentals (rock and soil classification, groundwater control, foundation types, superstructure load-bearing systems, seismic design principles); civil engineering materials (cement, structural concrete, steel reinforcement rebar grades HRB400/HRB500, masonry, waterproofing and insulation materials, exterior cladding); construction engineering techniques (deep foundation pit support: SMW soil mixing walls, cast-in-place diaphragm walls, bored cast-in-place piles; reinforced concrete works: formwork systems, rebar fabrication and lap/weld/mechanical splice lengths, concrete batching, pouring and curing; precast concrete PC assembly; structural steel fabrication and erection; roof and underground waterproofing; building energy-saving insulation and curtain wall engineering); and Standard Calculation Rules for Building Area of Construction Works (GB/T 50353-2013: 2.20 m / 2.10 m / 1.20 m height thresholds for full area, half area, and zero area; single/multi-storey buildings, basements, cantilevered/recessed balconies, bay windows, canopies, external staircases, and excluded spaces) alongside standard quantity takeoff rules (GB 50854-2013) for earthworks, concrete, rebar, masonry, and architectural finishes.

25%

Cost Engineering Case Analysis Principles & Calculations (建设工程造价案例分析)

Comprehensive practical case analysis and multi-step quantitative modeling across capital investment projects: financial feasibility modeling (construction period interest calculation with mid-year borrowing convention Ij = (Pj-1 + 0.5·Aj)·i, total investment schedule, working capital estimation, loan debt repayment schedules under equal principal vs. equal payment methods, financial cash flow tables for capital fund and total investment, EBITDA, profit and loss allocation, and tax schedules); comprehensive tender evaluation (comprehensive scoring method, deviation penalty formulas from benchmark evaluation price, unbalanced tender price analysis); engineering measurement and BOQ pricing verification; construction payment schedules (monthly earned value, sub-item and measure item valuation, advance payment deduction schedules T = P - M/N, price adjustment calculation, retention money withholding); contract variation and construction claim settlement (critical path method CPM network schedules, total float TF and free float FF analysis for time extension claims, machinery idling and labor standby compensation, force majeure loss sharing); and final completion settlement and asset delivery accounting.

How to Pass the Grade-1 Cost Engineer Examination Exam

What You Need to Know

Passing score: Fixed 60% passing mark per subject (60/100 for Papers 1–3, 72/120 for Paper 4) under a 4-year rolling cycle
Assessment: Question count varies by module
Time limit: 11.5 hours total across 2 days (Paper 1: 2.5h, Paper 2: 2.5h, Paper 3: 2.5h, Paper 4: 4.0h)
Exam fee: Set locally; Shanghai 2026 charges RMB 10 registration plus RMB 50 per subject (RMB 210 for all four)

Keys to Passing

Work through all 100 available questions
Review every answer and explanation
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Frequently Asked Questions

What is the China Grade-1 Cost Engineer (一级造价工程师) qualification examination?

The National Qualification Examination for Grade-1 Cost Engineer (全国一级造价工程师职业资格考试) is the national professional qualification examination for construction cost engineers. It is administered under the MOHURD, MOT, MWR, and MOHRSS framework and covers management, valuation, measurement, and specialty case analysis.

What are the four papers tested in the Grade-1 Cost Engineer examination?

The 2026 examination has four papers over two days: Construction Cost Management, Construction Engineering Valuation, and Construction Technology and Measurement are 2.5-hour objective papers; Construction Cost Case Analysis is four hours and is mixed objective/subjective for Civil & Building and Installation, while the Transportation and Water Resources versions are subjective.

How does the 4-year rolling passing cycle work?

Candidates taking all four papers (考全科) are subject to a 4-year rolling examination cycle (4年为一个周期的滚动管理). This means candidates must achieve passing scores on all four papers within four consecutive examination years. For candidates qualified for partial exemptions (免二科), passing scores on the remaining two papers must be achieved within two consecutive examination years.

What are the passing scores for each paper?

China implements a fixed national passing standard set at exactly 60% of the total available points for each paper: 60 out of 100 points for Construction Cost Management, 60 out of 100 points for Construction Engineering Valuation, 60 out of 100 points for Construction Technology and Measurement, and 72 out of 120 points for Construction Cost Case Analysis.

What are the eligibility requirements to sit for the Grade-1 Cost Engineer exam?

Eligibility depends on educational attainment and verified professional cost engineering work experience: 1) Associate Degree (专科) in Engineering Cost requires 4 years of professional experience (5 years for other engineering/economics degrees); 2) Bachelor's Degree (本科) accredited in Engineering Cost or Engineering Management requires 3 years of professional experience (4 years for other engineering/economics/management degrees); 3) Master's Degree or Second Bachelor's Degree requires 2 years of professional experience; 4) Doctoral Degree (PhD) requires 0–1 year. Candidates with non-related academic degrees require 1 additional year of work experience.

What are the examination registration fees in China?

Fees are set locally. As a current official example, Shanghai's 2026 notice charges RMB 10 registration plus RMB 50 for each subject, or RMB 210 for all four papers. Candidates should check their jurisdiction's notice.

Is this OpenExamPrep question bank in English or Chinese?

This OpenExamPrep question bank is an English-language multiple-choice study adaptation. It preserves integral Chinese technical terms and current standard designations, including GB/T 50500-2024, but it is not an official translation, official item-count simulation, or substitute for the mixed and subjective Case Analysis papers.