Pass the AACE International AACE Certification CCP Questions and answers with CertsForce

In afixed price contract, the contractor agrees to deliver the project at a set price, regardless of the actual costs incurred. This means that the contractor assumes all the performance risk, as any cost overruns must be absorbed by the contractor. If the project costs more than the fixed price agreed upon, the contractor cannot charge the owner more. Conversely, if the project is completed under budget, the contractor benefits by retaining the difference.

To calculate how many years it will take to earn $400 in interest on $800 at 4% compounded annually, we need to solve for nnn in the future value formula:

FV=PV×(1+i)nFV = PV \times (1 + i)^nFV=PV×(1+i)n

Where:

FVFVFV is the future value ($1,200 = $800 + $400)

PVPVPV is the present value ($800)

iii is the interest rate (4% or 0.04)

nnn is the number of years

1,200=800×(1.04)n1,200 = 800 \times (1.04)^n1,200=800×(1.04)n

Dividing both sides by 800:

1.5=(1.04)n1.5 = (1.04)^n1.5=(1.04)n

Taking the logarithm of both sides:

log⁡(1.5)=n×log⁡(1.04)\log(1.5) = n \times \log(1.04)log(1.5)=n×log(1.04) n=log⁡(1.5)log⁡(1.04)≈12n = \frac{\log(1.5)}{\log(1.04)} \approx 12n=log(1.04)log(1.5)​≈12

In acost reimbursable contract, the contractor is reimbursed for all allowable costs incurred during the project, plus an additional fee (which could be a fixed fee or a percentage of costs). This contract type provides several advantages but also has its limitations.

Key Points:

Advantages of Cost Reimbursable Contracts:

Simpler Proposal Evaluation:The focus is on selecting the best contractor rather than the lowest bid, making the evaluation process simpler.

Flexibility in Dealing with Changes:This contract type allows for adjustments and changes as the project progresses.

Early Start:Work can begin quickly without needing a fully defined scope since costs are reimbursed.

Owner Control:

While cost reimbursable contracts offer flexibility, they do not inherently mean that the owner controls all aspects of the work. The contractor typically manages the execution of the project, while the owner retains control over the budget and major decisions.

Conclusion:The correct answer isD. Owner controls all aspects of the workbecause, in cost reimbursable contracts, the contractor has significant control over how the work is performed, while the owner mainly controls costs and high-level decisions.

The compound interest factor used to determine the present value in year 5 with a 10% interest rate is calculated as:

PV=1(1+i)nPV = \frac{1}{(1 + i)^n}PV=(1+i)n1​

For i=10.5%i = 10.5\%i=10.5% and n=5n = 5n=5:

PV=1(1.105)5≈0.6209PV = \frac{1}{(1.105)^5} \approx 0.6209PV=(1.105)51​≈0.6209

Thus, the correct answer isB. 0.6209.

Given Scenario:

You need to calculate the future value of a series of annual investments of $20,000 over 10 years at a 10% interest rate.

This requires calculating the future value of an annuity. The formula is:

FV=P×((1+r)n−1r)FV = P \times \left(\frac{(1 + r)^n - 1}{r}\right)FV=P×(r(1+r)n−1​)

where:

P=20,000P = 20,000P=20,000 (annual payment)

r=0.10r = 0.10r=0.10 (interest rate)

n=10n = 10n=10 (number of years)

FV=20,000×((1+0.10)10−10.10)=20,000×(2.5937−10.10)=20,000×15.937≈318,740FV = 20,000 \times \left(\frac{(1 + 0.10)^{10} - 1}{0.10}\right) = 20,000 \times \left(\frac{2.5937 - 1}{0.10}\right) = 20,000 \times 15.937 \approx 318,740FV=20,000×(0.10(1+0.10)10−1​)=20,000×(0.102.5937−1​)=20,000×15.937≈318,740

Answer:B. $318,740

The median cost is found by ordering the unit costs and selecting the middle value. The ordered costs are:

$26.78, $34.50, $37.30, $40.00, $46.59, $55.00, $55.00, $65.00, $75.00

Since there are nine data points, the fifth value in this list is the median:

C. $40.00is the median unit cost.

Given Data:

Hours expended: 10,278 hours

CPI (Cost Performance Index): 0.93

SPI (Schedule Performance Index): 1.03

To calculate Earned Hours:

Earned Value (EV) can be calculated using the formula: EV=AC×CPI\text{EV} = \text{AC} \times \text{CPI}EV=AC×CPI

However, since the question asks for hours earned rather than monetary values, we interpret "earned hours" as: Earned Hours=Hours Expended×SPI\text{Earned Hours} = \text{Hours Expended} \times \text{SPI}Earned Hours=Hours Expended×SPI

Therefore: Earned Hours=10,278×1.03≈10,586 hours\text{Earned Hours} = 10,278 \times 1.03 \approx 10,586 \text{ hours}Earned Hours=10,278×1.03≈10,586 hours

Answer:B. 10,586

Given Scenario:

The question asks who can best use an unbalanced bid methodology.

In both organizational structures (Plan A and Plan B), subcontractors often work under contractors and can use unbalanced bids to improve their payment schedule, especially when working under contractors as shown in both plans.

For effective communication, the purpose of a communication must be understood bythe receiverfor the message to be clear. Communication is a two-way process where the speaker conveys a message and the receiver interprets it. The clarity of the communication is determined by how well the receiver understands the intended message. Miscommunication often occurs when the receiver's interpretation does not match the speaker's intent, highlighting the importance of clear, concise, and well-structured communication in any context, especially in project management and team coordination.

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In organizational structureA, multiple contractors are directly coordinated by the Engineer-Owner. AConstruction Managertype agreement is beneficial in such a scenario tobetter coordinate contractors. The Construction Manager ensures that the activities of the various contractors are synchronized and that conflicts are minimized, leading to a more efficient construction process. Therefore, the correct answer isA. To better coordinate contractors.