AACE International Certified Cost Professional (CCP) Exam CCP Question # 54 Topic 6 Discussion

AACE International Certified Cost Professional (CCP) Exam CCP Question # 54 Topic 6 Discussion

CCP Exam Topic 6 Question 54 Discussion:
Question #: 54
Topic #: 6

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%.

What Kind of optimization modeling is used in making investment analysis to evaluate the risks associated with the potential investment?


A.

Linear Probability Model


B.

Business Modeling


C.

Five-stop Regression Model


D.

Monte Carlo Simulation


Get Premium CCP Questions

Contribute your Thoughts:


Chosen Answer:
This is a voting comment (?). It is better to Upvote an existing comment if you don't have anything to add.