Question 1

The probable cost of a new project to be estimated is AED 150

Million, what will be approximate cost of preparing estimate for
this project, if you want a ball park figure?

a. 6500
b. 7500
c. 8000
d. 1000

The correct answer is: 7500

Question 2

Answer the following questions using the table below. As per the plan
Work Package 1 to 6 should have been 100% completed.

Work Package ACWP Progress BCWS

1 17 100% 14
2 14 60% 16
3 5 55% 14
4 20 100% 18
5 7 50% 12
6 12 80% 18
7 - - 12
8 - - 18
9 - - 15
10 - - 10

Q) Find CPI

a. 0.93
b. 157
c. 0.76
d. 92

The correct answer is: 0.93

Question 3

Answer the following questions using the table below. As per the plan
Work Package 1 to 6 should have been 100% completed.

Work Package ACWP Progress BCWS

1 17 100% 14
2 14 60% 16
3 5 55% 14
4 20 100% 18
5 7 50% 12
6 12 80% 18
7 - - 12
8 - - 18
9 - - 15
10 - - 10

Q) Find ETC (Past performance continues)

a. 77
b. 83.1
c. 158.1
d. 152.3

The correct answer is: 83.1

Question 4

Answer the following questions using the table below. As per the plan
Work Package 1 to 6 should have been 100% completed.

Work Package ACWP Progress BCWS

1 17 100% 14
2 14 60% 16
3 5 55% 14
4 20 100% 18
5 7 50% 12
6 12 80% 18
7 - - 12
8 - - 18
9 - - 15
10 - - 10

Q) Find EAC (Past performance continues)

a. 77
b. 83.1
c. 158.1
d. 152.3

The correct answer is: 158.1

Question 5

Answer the following questions using the table below. As per the plan
Work Package 1 to 6 should have been 100% completed.

Work Package ACWP Progress BCWS

1 17 100% 14
2 14 60% 16
3 5 55% 14
4 20 100% 18
5 7 50% 12
6 12 80% 18
7 - - 12
8 - - 18
9 - - 15
10 - - 10

Q) Find ETC (Past performance will not continue)

a. 147
b. 157
c. 77
d. 92

The correct answer is: 77

Question 6

Answer the following questions using the table below. As per the plan
Work Package 1 to 6 should have been 100% completed.

Work Package ACWP Progress BCWS

1 17 100% 14
2 14 60% 16
3 5 55% 14
4 20 100% 18
5 7 50% 12
6 12 80% 18
7 - - 12
8 - - 18
9 - - 15
10 - - 10

Q) Find EAC (Past performance will not continue)

a. 152.3
b. 157
c. 75
d. 92

The correct answer is: 152.3

Question 7

Answer the following questions using the table below. As per the plan
Work Package 1 to 6 should have been 100% completed.

Work Package ACWP Progress BCWS

1 17 100% 14
2 14 60% 16
3 5 55% 14
4 20 100% 18
5 7 50% 12
6 12 80% 18
7 - - 12
8 - - 18
9 - - 15
10 - - 10

Q) Find VAC (Past performance will not continue)

a. -11.1
b. 157
c. 75
d. 92

The correct answer is: -11.1

Question 8

Answer the following questions using the table below. As per the plan
Work Package 1 to 6 should have been 100% completed.

Work Package ACWP Progress BCWS

1 17 100% 14
2 14 60% 16
3 5 55% 14
4 20 100% 18
5 7 50% 12
6 12 80% 18
7 - - 12
8 - - 18
9 - - 15
10 - - 10

Q) Find EAC (Past performance will not continue)

a. 147
b. -5.3
c. 75
d. 92

The correct answer is: -5.3

Question 9
Earned value (BCWP) involves all of the following EXCEPT:

a. The originally allocated budget amount.

b. Actual cost.
c. Value of the budgeted cost of work performed.
d. Budgeted amount for the work actually completed.

The correct answer is: Actual cost.

Question 10
Item BCWS ACWP BCWP
1 10,000 11,000 10,000
2 9,000 8,000 7,000
3 8,000 8,000 8,000
4 7,000 7,000 5,000

Q) Which item has the LOWEST SPI?

a. Item 1
b. Item 2
c. Item 3
d. Item 4

The correct answer is: Item 4

Question 11
A particular project has only 4 work packages and the
following data were collected during the execution of the
project.

Planned
Work Total Installed Actual
Productivity
Package Quantities Quantity Hours
Rate / Unit
1.1 300 Sq. Mt 3 Hours 100 1200
1.2 4200 1 Hour 2200 2300
Quantity
2.1 60 Ton 10 Hours 20 200
2.2 460 Sq. Ft 2 Hours 60 340

Scenario Question - Answer question from the below scenario

Q) What is the weightage of work package 1.2 in this project?

a. 13.6%
b. 63.44%
c. 9.06%
d. 13.90%

The correct answer is: 63.44%

Question 12
A particular project has only 4 work packages and the
following data were collected during the execution of the
project.

Planned
Work Total Installed Actual
Productivity
Package Quantities Quantity Hours
Rate / Unit
1.1 300 Sq. Mt 3 Hours 100 1200
1.2 4200 1 Hour 2200 2300
Quantity
2.1 60 Ton 10 Hours 20 200
2.2 460 Sq. Ft 2 Hours 60 340

Scenario Question - Answer question from the below scenario

Q) What is the total hour expended as of today?

a. 1200
b. 6620
c. 4200
d. 11900

The correct answer is: 6620

Question 13
A particular project has only 4 work packages and the
following data were collected during the execution of the
project.

Planned
Work Total Installed Actual
Productivity
Package Quantities Quantity Hours
Rate / Unit
1.1 300 Sq. Mt 3 Hours 100 1200
1.2 4200 1 Hour 2200 2300
Quantity
2.1 60 Ton 10 Hours 20 200
2.2 460 Sq. Ft 2 Hours 60 340

Scenario Question - Answer question from the below scenario

Q) What is the Earned Work hours of the project as of today?

a. 2820
b. 4040
c. 6620
d. 4390

The correct answer is: 2820

Question 14
A particular project has only 4 work packages and the
following data were collected during the execution of the
project.

Planned
Work Total Installed Actual
Productivity
Package Quantities Quantity Hours
Rate / Unit
1.1 300 Sq. Mt 3 Hours 100 1200
1.2 4200 1 Hour 2200 2300
Quantity
2.1 60 Ton 10 Hours 20 200
2.2 460 Sq. Ft 2 Hours 60 340

Scenario Question - Answer question from the below scenario

Q) If the current productivity level continues what will be the

Estimate at Completion?

a. 11198
b. 4390
c. 2820
d. 6620

The correct answer is: 11198

Question 15
A particular project has only 4 work packages and the
following data were collected during the execution of the
project.

Planned
Work Total Installed Actual
Productivity
Package Quantities Quantity Hours
Rate / Unit
1.1 300 Sq. Mt 3 Hours 100 1200
1.2 4200 1 Hour 2200 2300
Quantity
2.1 60 Ton 10 Hours 20 200
2.2 460 Sq. Ft 2 Hours 60 340

Scenario Question - Answer question from the below scenario

Q) What is the actual productivity rate of Work Package 2.1?

a. 10 Hours / Ton
b. 12 Hours / Ton
c. 14 Hours / Ton
d. 22 Hours / Ton

The correct answer is: 10 Hours / Ton

Question 16
A particular project has only 4 work packages and the
following data were collected during the execution of the
project.

Planned
Work Total Installed Actual
Productivity
Package Quantities Quantity Hours
Rate / Unit
1.1 300 Sq. Mt 3 Hours 100 1200
1.2 4200 1 Hour 2200 2300
Quantity
2.1 60 Ton 10 Hours 20 200
2.2 460 Sq. Ft 2 Hours 60 340

Scenario Question - Answer question from the below scenario

Q) What is the current total progress of the project?

a. 13.6%
b. 42.60%
c. 3.02%
d. 13.9%

The correct answer is: 42.60%

Question 17
A particular project has only 4 work packages and the
following data were collected during the execution of the
project.

Planned
Work Total Installed Actual
Productivity
Package Quantities Quantity Hours
Rate / Unit
1.1 300 Sq. Mt 3 Hours 100 1200
1.2 4200 1 Hour 2200 2300
Quantity
2.1 60 Ton 10 Hours 20 200
2.2 460 Sq. Ft 2 Hours 60 340

Scenario Question - Answer question from the below scenario

Q) What is the current productivity index of this project?

a. 0.698
b. 0.721
c. 1
d. 1.698

The correct answer is: 0.698

Question 18

The term take-off is also known as:

a. Bill of Quantities
b. Front End Loading
c. Bottom-Up Estimating
d. Pricing

The correct answer is: Bill of Quantities

Question 19

Which of the following progress measurement method is

suitable for subjective evaluation of percent complete and
should be used only where more discrete methods cannot be
used?

a. Supervisor Opinion
b. Cost Ratio
c. Incremental Milestone
d. Weighted or Equivalent Units

The correct answer is: Supervisor Opinion

Question 20

Which of the following progress measurement technique is

suitable for construction activities such as earthwork, concrete
work, and wire pulling?

a. Units Completed
b. Cost Ratio
c. Incremental Milestone
d. Weighted or Equivalent Units

The correct answer is: Units Completed

Question 21

Which of the formula is used to calculate Productivity Index?

a. CWH / Actual Work Hours

b. EWH / Planned Work Hours
c. CWH / Planned Work Hours
d. Earned Value / Planned Value

The correct answer is: CWH / Actual Work Hours

Question 22

As per AACEI standard, ANSI's Budget Estimate falls under what

class of estimate?

a. Class 5 & 4
b. Class 4 & 3
c. Class 3 & 2
d. Class 2 & 1

The correct answer is: Class 4 & 3

Question 23

Which of the following progress measurement technique is

suitable for where the task is a major effort involving a long
period of time and composed of two or more overlapping
subtasks, each with a different unit of measurement?

a. Units Completed
b. Cost Ratio
c. Incremental Milestone
d. Weighted or Equivalent Units

The correct answer is: Weighted or Equivalent Units

Question 24

Which of the formula is used to calculate Credit Work Hours

(CWH)?

a. Budget Unit Rate X Actual Quantity

b. Planned Unit Rate X Productivity Index
c. Actual Quantity + Estimate At Completion
d. Progress x Actual Cost

The correct answer is: Budget Unit Rate X Actual Quantity

Question 25

Which of the following EAC method is used for forecasting

costs and work hours which assumes that work from a
particular point forward will progress at planned rates, whether
or not those rates have prevailed to this point.

a. (ACWP) + (BAC - BCWP)

b. BAC / CPI
c. (BAC/SPI)
d. (ACWP) + (BCWP)

The correct answer is: (ACWP) + (BAC - BCWP)

Question 26

AACEI Class 5 falls under which ANSI estimating classification?

a. Order of Magnitude
b. Budget Estimate
c. Definitive Estimate
d. None of the above

The correct answer is: Order of Magnitude

Question 27

If you want to prepare estimation for bidding purpose, what

class of estimate would you suggest?

a. Class 3 - Budget Estimate

b. Class 5 - ROM
c. Class 2 - Definitive Estimate
d. Class 4 - Budget Estimate

The correct answer is: Class 2 - Definitive Estimate

Question 28

As a contractor what class of estimation you would prefer for

lump sum contract?

a. Class 3
b. Class 4
c. Class 5
d. Class 1

The correct answer is: Class 1

Question 29
You have recently completed (Year 2007) a 150,000 BBL / Day
LPG plant with the cost 500 Million in Abu Dhabi, UAE. Prepare
an estimated cost for 90,000 BBL / Day LPG to be built in
Ajman, UAE for a period of 2 years. Adjustment factor:

a)Plant in Ajman doesn't require some specification worth 50

Million which was complete in Abu Dhabi Plant.

b)Construction in Ajman cost 1.1 times more than construction

in Abu Dhabi, due to soil condition.

c)Escalation for 2 years will be 5% for the first year and 4% for
the second year.

d)Recent history shows a capacity factor of 0.75 is appropriate

for this facility.

What will be the cost of new plant in Ajman?

a. 369 Million
b. 388 Million
c. 791 Million
d. I give up!!!

The correct answer is: 369 Million

Question 30

The cost baseline has all of the following characteristics

EXCEPT:

a. It is a time-phased budget that will be used to measure and

monitor cost performance on the project.
b. It shows the actual cost expenditures throughout the life of
the project.
c. It is developed by summing estimated costs by period.
d. It is usually displayed in the form of an S-curve

The correct answer is: It is usually displayed in the form of an S-

curve
Question 31

Which of the following choices indicates that your project is 9%

under budget?

a. The cumulative ACWP was 100, and the cumulative BCWP

was 110.
b. The cumulative BCWS was 100, and the cumulative ACWP
was 110.
c. The cumulative BCWP was 100, and the cumulative BCWS
was 110.
d. The cumulative ACWP was 110, and the cumulative BCWP
was 100.

The correct answer is: The cumulative ACWP was 100, and the
cumulative BCWP was 110.
Question 32

An investor makes a loan of $5000, to be repaid in one lump

sum at the end of one year. What annual interest rate
corresponds to a lump-sum payment of $5425?

a. 7.5%
b. 8.5%
c. 9.3%
d. 4.25%

The correct answer is: 8.5%

Question 33

Mr. Simon deposits $20000 in a savings account that pays

interest at 10% per year, compounded annually. How much
money he will have at the end of 15 years.

a. $ 80,453
b. $ 85,902
c. $ 75,900
d. $ 83,540

The correct answer is: $ 83,540

Question 34

Mr. Pranal wants to retire after 35 years. He wants to make sure

that at the end of 35 years he has at least $ 1000,000. How
much money he should invest per year, if the bank offers him
10% fixed interest rate per year.

a. $ 3290
b. $ 4291
c. $ 3690
d. $ 2980

The correct answer is: $ 3690

Question 35

XYZ Bank offers 12% interest rate. If you deposit $ 8000, how
many years it will take to accumulate $ 20000.

a. 9.50 years
b. 8.08 Years
c. 9.02 Years
d. 10.62 years

The correct answer is: 8.08 Years

Question 36

A bank offers 10% compound interest calculated on quarterly

basis. A customer deposits $ 2000 each on 1st January, 1st of
April, 1st July, and 1st October. What will be the amount
available at the end of one year?

a. $ 8512.65
b. $ 8120.24
c. $ 8826.12
d. $ 7894.45

The correct answer is: $ 8512.65

Question 37

If g= 6%, i=12% and number of years is 15 years. The initial sum is

$ 4000.

Calculate the Present worth

a. $ 37,890
b. $ 45,194
c. $ 24,041
d. $ 19,092

The correct answer is: $ 37,890

Question 38

Scenario No. EA-B2

The purchase price of new CNC machine is $ 80,000 and its

annual operating cost is $ 5000. The machine has a life of 10
years with $ 30,000 salvage value. It is expected to generate $
20,000 in revenues in each year of its life. The company pays
30% tax. Calculate the Net Present Value when MARR is 8%,
10% and 12%. Use straight line depreciation Method

What is the Net Present Worth when MARR is 12%

a. $ 11,500
b. $ 12,400
c. $ -2,540
d. $ -3,890

The correct answer is: $ -2,540

Question 39

Scenario No. EA-B2

The purchase price of new CNC machine is $ 80,000 and its

annual operating cost is $ 5000. The machine has a life of 10
years with $ 30,000 salvage value. It is expected to generate $
20,000 in revenues in each year of its life. The company pays
30% tax. Calculate the Net Present Value when MARR is 8%,
10% and 12%. Use straight line depreciation Method

What is the Present Worth Benefit when MARR is 8%

a. $ 94,416
b. $ 75,520
c. $ 67,800
d. $ 88,000

The correct answer is: $ 94,416

Question 40

The purchase price of new CNC machine is $ 80,000 and its

annual operating cost is $ 5000. The machine has a life of 10
years with $ 30,000 salvage value. It is expected to generate $
20,000 in revenues in each year of its life. The company pays
30% tax. Calculate the Net Present Value when MARR is 8%,
10% and 12%. Use straight line depreciation Method

Which are the most appropriate factors to be used in this

problem?

a. F/P, F/A
b. F/A, P/A
c. A/G, P/G
d. P/A, P/F

The correct answer is: P/A, P/F

Question 41

The purchase price of new CNC machine is $ 80,000 and its

annual operating cost is $ 5000. The machine has a life of 10
years with $ 30,000 salvage value. It is expected to generate $
20,000 in revenues in each year of its life. The company pays
30% tax. Calculate the Net Present Value when MARR is 8%,
10% and 12%. Use straight line depreciation Method

How much tax would have been paid at the end of 10 years?
(Cumulative)

a. $ 30,000
b. $ 45,000
c. $ 25,000
d. $ 35,000

The correct answer is: $ 30,000

Question 42

The purchase price of new CNC machine is $ 80,000 and its

annual operating cost is $ 5000. The machine has a life of 10
years with $ 30,000 salvage value. It is expected to generate $
20,000 in revenues in each year of its life. The company pays
30% tax. Calculate the Net Present Value when MARR is 8%,
10% and 12%. Use straight line depreciation Method

What is the correct factor for P/A when MARR is 10%

a. 6.845
b. 6.346
c. 7.56
d. 6.145

The correct answer is: 6.145

Question 43

The purchase price of new CNC machine is $ 80,000 and its

annual operating cost is $ 5000. The machine has a life of 10
years with $ 30,000 salvage value. It is expected to generate $
20,000 in revenues in each year of its life. The company pays
30% tax. Calculate the Net Present Value when MARR is 8%,
10% and 12%. Use straight line depreciation Method

What will be the book value of the CNC Machine at the end
of year 6

a. $ 60,000
b. $ 50,000
c. $ 40,000
d. $ 80,000

The correct answer is: $ 50,000

Question 44

The purchase price of new CNC machine is $ 80,000 and its

annual operating cost is $ 5000. The machine has a life of 10
years with $ 30,000 salvage value. It is expected to generate $
20,000 in revenues in each year of its life. The company pays
30% tax. Calculate the Net Present Value when MARR is 8%,
10% and 12%. Use straight line depreciation Method

What is the present worth of salvage value when MARR is 8%

a. $ 13,896
b. $ 15,904
c. $ 14,560
d. $ 15,906

The correct answer is: $ 13,896

Question 45

A new plant to produce copper wires requires an initial

investment of $ 10 million. It is expected that after 2 years of
operation and additional investment of 5 million will be
required, and after 5 years of operation an additional
investment of $ 3 million will be required. Annual operating
costs will be $ 4 million and annual revenues will be $ 8 million.
The life of the plant is expected 10 years. If the interest rate is
15% per year, compounded annually, Calculate the Net
positive Worth and answer the below give questions.

What is the net present worth of the New Plant?

a. $4,200,100
b. $4,803,900
c. $5,202,801
d. $3,500,120

The correct answer is: $4,803,900

Question 46
Scenario No. EA-B3

A new plant to produce copper wires requires an initial

investment of $ 10 million. It is expected that after 2 years of
operation and additional investment of 5 million will be
required, and after 5 years of operation an additional
investment of $ 3 million will be required. Annual operating
costs will be $ 4 million and annual revenues will be $ 8 million.
The life of the plant is expected 10 years. If the interest rate is
15% per year, compounded annually, Calculate the Net
positive Worth and answer the below give questions.

What is the Present worth of total future investment?

a. $2,238,901
b. $3,445,678
c. $5,272,100
d. $6,123,100

The correct answer is: $5,272,100

Question 47
Scenario No. EA-B3

A new plant to produce copper wires requires an initial

investment of $ 10 million. It is expected that after 2 years of
operation and additional investment of 5 million will be
required, and after 5 years of operation an additional
investment of $ 3 million will be required. Annual operating
costs will be $ 4 million and annual revenues will be $ 8 million.
The life of the plant is expected 10 years. If the interest rate is
15% per year, compounded annually, Calculate the Net
positive Worth and answer the below give questions.

Compound interest factor used to determine Present value of

5th year investment is..

a. 0.5623
b. 0.4972
c. 0.4226
d. 0.4050

The correct answer is: 0.4972

Question 48
Scenario No. EA-B3

A new plant to produce copper wires requires an initial

investment of $ 10 million. It is expected that after 2 years of
operation and additional investment of 5 million will be
required, and after 5 years of operation an additional
investment of $ 3 million will be required. Annual operating
costs will be $ 4 million and annual revenues will be $ 8 million.
The life of the plant is expected 10 years. If the interest rate is
15% per year, compounded annually, Calculate the Net
positive Worth and answer the below give questions.

The most appropriate factors to be used in this problem are

a. A/F, F/P
b. A/P, F/P
c. A/P, A/G
d. P/A, P/F

The correct answer is: P/A, P/F

Question 49
Scenario No. EA-B3

A new plant to produce copper wires requires an initial

investment of $ 10 million. It is expected that after 2 years of
operation and additional investment of 5 million will be
required, and after 5 years of operation an additional
investment of $ 3 million will be required. Annual operating
costs will be $ 4 million and annual revenues will be $ 8 million.
The life of the plant is expected 10 years. If the interest rate is
15% per year, compounded annually, Calculate the Net
positive Worth and answer the below give questions.

Which factor will be used to determine the present worth of

future annual returns?

a. 5.019
b. 4.802
c. 0.9082
d. 3.0982

The correct answer is: 5.019

Question 50
Scenario No. EA-B3

A new plant to produce copper wires requires an initial

investment of $ 10 million. It is expected that after 2 years of
operation and additional investment of 5 million will be
required, and after 5 years of operation an additional
investment of $ 3 million will be required. Annual operating
costs will be $ 4 million and annual revenues will be $ 8 million.
The life of the plant is expected 10 years. If the interest rate is
15% per year, compounded annually, Calculate the Net
positive Worth and answer the below give questions.

What is the present worth of 2nd year investment?

a. $3,120,900
b. $4,901,124
c. $2,989,000
d. $3,780,500

The correct answer is: $3,780,500

Question 51
Scenario No. EA-B3

A new plant to produce copper wires requires an initial

investment of $ 10 million. It is expected that after 2 years of
operation and additional investment of 5 million will be
required, and after 5 years of operation an additional
investment of $ 3 million will be required. Annual operating
costs will be $ 4 million and annual revenues will be $ 8 million.
The life of the plant is expected 10 years. If the interest rate is
15% per year, compounded annually, Calculate the Net
positive Worth and answer the below give questions.

What is the compound interest factor used to determine

Present value of 2nd year investment?

a. 0.6712
b. 0.7000
c. 0.7561
d. 0.7901

The correct answer is: 0.7561

Question 52

The ABC company is building a new plant, whose equipment

maintenance costs are expected to be $500 the first year,
$150 the second year, $200 the third year, $250 the fourth year,
etc., increasing by $50 per year through the 10th year. The
plant is expected to have a 10-year life. Assuming the interest
rate is 8%, compounded annually, how much should the
company plan to set aside now in order to pay for the
maintenance?

a. $2340
b. $4320
c. $4400
d. $12000

The correct answer is: $2340

Question 53

A man has deposited $50000 in a retirement income plan with

a local bank. This bank pays 9% per year, compounded
annually, on such deposits. What is the maximum amount the
man can withdraw at the end of each year and still have the
fund last for 12 years?

a. $4982
b. $6400
c. $6800
d. $6982

The correct answer is: $6982

Question 54

A plant is considering buying a second-hand machine to use

as stand-by equipment. The machine costs $3000 and has an
economic life of 10 years, at which time its salvage value is
$600; expected annual operating costs are $100. Without a
stand-by machine, the plant would have to shut down an
average of seven days a year at a cost of $50 per day. If the
MARR is 10% is it expedient to buy the stand-by machine?

a. The stand-by machine should not be purchased

b. The stand-by machine should be purchased
c. The stand-by machine can be leased
d. Need more information, to support the answer

The correct answer is: The stand-by machine should not be

purchased
Question 55

A bank pays interest at the rate of 6% per year, compounded

monthly. If a person deposits $2500 in a savings account at the
bank, how much money will accumulate by the end of 2
years?

a. $2290
b. $2818
c. $2900
d. $2100

The correct answer is: $2818

Question 56

Scenario No. EA-B1

A computer system can be purchased for $18000. The

operating costs are $10000 and will increase by 7% every year,
and the useful life is expected to be 5 years, with $5000
salvage value that time. The present annual sales volume is
$16000 and would increase by 10% every year, as a result of
acquiring the computer system. The company's tax rate is 50%.
Using straight-line depreciation technique with 10% MARR,

Answer the below question, based on the above scenario:

What is the Net Present Worth of this investment?

a. $7405
b. $4875
c. $1405
d. $9120

The correct answer is: $4875

Question 57

Scenario No. EA-B1

A computer system can be purchased for $18000. The

operating costs are $10000 and will increase by 7% every year,
and the useful life is expected to be 5 years, with $5000
salvage value that time. The present annual sales volume is
$16000 and would increase by 10% every year, as a result of
acquiring the computer system. The company's tax rate is 50%.
Using straight-line depreciation technique with 10% MARR,

Answer the below question, based on the above scenario:

What is the present worth of Benefit in this investment?

a. $19405
b. $18000
c. $22,875
d. $19000

The correct answer is: $19405

Question 58

Scenario No. EA-B1

A computer system can be purchased for $18000. The

operating costs are $10000 and will increase by 7% every year,
and the useful life is expected to be 5 years, with $5000
salvage value that time. The present annual sales volume is
$16000 and would increase by 10% every year, as a result of
acquiring the computer system. The company's tax rate is 50%.
Using straight-line depreciation technique with 10% MARR,

Answer the below question, based on the above scenario:

What is the taxable income in year 3?

a. $5311
b. $4000
c. $3400
d. $3600

The correct answer is: $5311

Question 59
Scenario No. EA-B1

A computer system can be purchased for $18000. The

operating costs are $10000 and will increase by 7% every year,
and the useful life is expected to be 5 years, with $5000
salvage value that time. The present annual sales volume is
$16000 and would increase by 10% every year, as a result of
acquiring the computer system. The company's tax rate is 50%.
Using straight-line depreciation technique with 10% MARR,

Answer the below question, based on the above scenario:

How much tax would have been paid at the end of year 5?
(Cumulative)

a. $8500
b. $8900
c. $13,589
d. $9100

The correct answer is: $13,589

Question 60

Scenario No. EA-B1

A computer system can be purchased for $18000. The

operating costs are $10000 and will increase by 7% every year,
and the useful life is expected to be 5 years, with $5000
salvage value that time. The present annual sales volume is
$16000 and would increase by 10% every year, as a result of
acquiring the computer system. The company's tax rate is 50%.
Using straight-line depreciation technique with 10% MARR,

Answer the below question, based on the above scenario:

What is the applicable factor for P/F in 5th year?

a. 0.909
b. 3.791
c. 0.6209
d. 1.661

The correct answer is: 0.6209

Question 61

Scenario No. EA-B1

A computer system can be purchased for $18000. The

operating costs are $10000 and will increase by 7% every year,
and the useful life is expected to be 5 years, with $5000
salvage value that time. The present annual sales volume is
$16000 and would increase by 10% every year, as a result of
acquiring the computer system. The company's tax rate is 50%.
Using straight-line depreciation technique with 10% MARR,

Answer the below question, based on the above scenario:

What is the book value of the computer at the end of year 3?

a. $10200
b. $18000
c. $12400
d. $21000

The correct answer is: $10200

Question 62

If $ 500 is earned in five months on an investment of $ 10,000,

what is the annual rate of simple interest?

a. 11.5%
b. 12%
c. 10.5%
d. 11%

The correct answer is: 12%

Question 63

Cost of a particular item in USA is $ 80. What will be the cost of

same item after two years if the expected inflation will be 6%
per year?

a. $ 89.88
b. $ 75.46
c. $ 95.66
d. $ 82.45

The correct answer is: $ 89.88

Question 64

Suppose you are planning to invest $ 50,000 in a particular

bond. Returns on the bond are as follows.

First Year = $ 20,000,Second Year = $ 30,000, Third Year = $

30,000

You are looking for 10% MARR. Will it be profitable to buy the
bond?

a. It will be loss
b. There will be profit only in first year
c. It will be profit
d. It will be neither profit nor loss

The correct answer is: It will be profit

Question 65

What is the WBS typically used for?

a. To organize and define the total scope of the project.

b. To identify the logical person to be project sponsor.
c. To define the level of reporting the seller provides the buyer.
d. As a record of when work elements are assigned to
individuals.

The correct answer is: To organize and define the total scope
of the project.
Question 66

Which AACE Class of estimate requires highest level of project

definition?

a. Class 5
b. Class 2
c. Class 3
d. Class 1

The correct answer is: Class 1

Question 67

Which type of estimate requires least amount of effort to

prepare?

a. Order of Magnitude
b. Budget estimate
c. Definitive estimate
d. Class 2

The correct answer is: Order of Magnitude

Question 68

If the construction cost of 200 room hotel was $1Million. What

will be the approximate cost to build 400 room hotel?

a. $ 3 Million
b. $ 1.2 Million
c. $ 1.8 Million
d. $ 2 Million

The correct answer is: $ 2 Million

Question 69

The process of quantifying the material and labor associated

with the project is known as

a. Adjusting
b. Take off
c. Costing
d. Quantification

The correct answer is: Take off

Question 70

Which of the following is not a characteristic used to distinguish

AACE classes of Estimates

a. End usage
b. Degree of Project Definition
c. Estimating Methodology
d. Project Size

The correct answer is: Project Size

Question 71

If the cumulative BCWS = 95, Cumulative BCWP = 88, ACWP =

90, the project is

a. Ahead of schedule and cost over run

b. Ahead of schedule and cost under run
c. Ahead of schedule
d. Behind the schedule & cost over run

The correct answer is: Behind the schedule & cost over run
Question 72

What is the mean for data 4,2,5,9,5,8,7,3,5,6,4 ______

a. 9
b. 5
c. 5.27
d. 4.65

The correct answer is: 5.27

Question 73

For Capacity Factor method the proration factor typically lies

between

a. 0.5 and 0.85

b. 0.1 and 0.4
c. 1 and 2
d. 1.2 and 1.8

The correct answer is: 0.5 and 0.85

Question 74

Any cost that is specifically identified with a particular final cost

objective, but not necessarily limited to items that are
incorporated in the end product as material or labor is called
as:

a. Indirect Costs
b. Direct Costs
c. Variable Costs
d. Fixed Costs

The correct answer is: Direct Costs

Question 75
Scenario No. GSK-B1

As the cost engineer, you have been requested to provide

pertinent data for a new product project decision. The
company plans to produce widget and predicted sales
forecast.

• Widget Selling Price USD 12

• Cost to the company to manufacture one widget USD 9

Monthly fixed costs are as follows:

• RentUSD 3600
• WagesUSD 1200
• OverheadsUSD 400

Answer the following question using the data above: The

marketing department decided to increase the unit selling
price to USD 18. The new break even unit is:

a. 589
b. 578
c. 700
d. 1733

The correct answer is: 578

Question 76
Scenario No. GSK-B1

As the cost engineer, you have been requested to provide

pertinent data for a new product project decision. The
company plans to produce widget and predicted sales
forecast.

• Widget Selling Price USD 12

• Cost to the company to manufacture one widget USD 9

Monthly fixed costs are as follows:

• RentUSD 3600
• WagesUSD 1200
• OverheadsUSD 400

Answer the following question using the data above: If the

company considers USD 2000 as the minimum acceptable
income, the number units that should be sold is:

a. 2400
b. 800
c. 1200
d. 2000

The correct answer is: 2400

Question 77
As the cost engineer, you have been requested to provide
pertinent data for a new product project decision. The
company plans to produce widget and predicted sales
forecast.

• Widget Selling Price USD 12

• Cost to the company to manufacture one widget USD 9

Monthly fixed costs are as follows:

• RentUSD 3600
• WagesUSD 1200
• OverheadsUSD 400

Answer the following question using the data above: If the rent
increases to USD 4100, the new break even revenue is:

a. 11999
b. 1900
c. 11900
d. 22800

The correct answer is: 22800

Question 78
As the cost engineer, you have been requested to provide
pertinent data for a new product project decision. The
company plans to produce widget and predicted sales
forecast.

• Widget Selling Price USD 12

• Cost to the company to manufacture one widget USD 9

Monthly fixed costs are as follows:

• RentUSD 3600
• WagesUSD 1200
• OverheadsUSD 400

Answer the following question using the data above: What

sales are needed to break even?

a. 20800
b. 19000
c. 11900
d. 22800

The correct answer is: 20800

Question 79
As the cost engineer, you have been requested to provide
pertinent data for a new product project decision. The
company plans to produce widget and predicted sales
forecast.

• Widget Selling Price USD 12

• Cost to the company to manufacture one widget USD 9

Monthly fixed costs are as follows:

• RentUSD 3600
• WagesUSD 1200
• OverheadsUSD 400

Answer the following question using the data above:

How many units are required per month to break even?

a. 589
b. 578
c. 700
d. 1733

The correct answer is: 1733

Question 80
As the cost engineer, you have been requested to provide
pertinent data for a new product project decision. The
company plans to produce widget and predicted sales
forecast.

• Widget Selling Price USD 12

• Cost to the company to manufacture one widget USD 9
Monthly fixed costs are as follows:
• RentUSD 3600
• WagesUSD 1200
• OverheadsUSD 400

Answer the following question using the data above: If the

fixed rent remains unchanged, and there is an additional
variable cost of USD 1, the monthly breakeven point in number
of units is:

a. 5890
b. 2600
c. 700
d. 1733

The correct answer is: 2600

Question 81
As the cost engineer, you have been requested to provide
pertinent data for a new product project decision. The
company plans to produce widget and predicted sales
forecast.

• Widget Selling Price USD 12

• Cost to the company to manufacture one widget USD 9

Monthly fixed costs are as follows:

• RentUSD 3600
• WagesUSD 1200
• OverheadsUSD 400

Answer the following question using the data above:

If USD 7800 is the target net profit, then the total sales revenue
is:

a. 20800
b. 52000
c. 61900
d. 4333

The correct answer is: 52000

Question 82

Earned value technique (EVT) can best be defined as:

a. Analysis of the value of the equipment that has been

installed as of the data date.
b. Analysis of the sum of the labor costs, which have been
incurred on the project to date.
c. A method of project performance measurement.
d. A method of measuring the amount of money that has
been spent to date.

The correct answer is: A method of project performance measurement.

Question 83

What is opportunity cost?

a. Assets are carried on the firm's books at original cost less any
depreciation.
b. Funds already spent by virtue of past decisions.
c. The value of an item as reflected in the firm's book.
d. The foregone benefit by choosing one alternative over
another.

The correct answer is: The foregone benefit by choosing one

alternative over another.
Question 84

The selection of a project based on BCR should satisfy which of

the following criteria?

a. BCR must be positive

b. BCR>1
c. BCR > IRR
d. BCR > Payback period

The correct answer is: BCR>1

Question 85

Which of the following will help the project team to readily

discern the work of each activity and the project as a whole?

a. Activity list
b. WBS
c. Scope Statement
d. PERT

The correct answer is: Activity list

Question 86

The degree of flexibility that an activity has which does not

affect the float available on any preceding or succeeding
activities is known as:

a. Free Float
b. Total Float
c. Negative Float
d. Independent Float

The correct answer is: Independent Float

Question 87

Scheduling activities to run simultaneously instead of

consecutively as much aspossible, in order to speed work
completion is called as:

a. Fast-Tracking
b. Crashing
c. Design/Build
d. Parallel Engineering

The correct answer is: Fast-Tracking

Question 88

The amount of time delay between the completion of one task

and the start of its successortask is known as:

a. Lag Time
b. Lag Duration
c. Lag
d. Lag Relationship

The correct answer is: Lag Time

Question 89

A consolidated schedule incorporating multiple, related

projects or parts of aproject so that they may be monitored
and controlled as a unit is known as:

a. Final Schedule
b. Level 1 Schedule
c. Master Schedule
d. Parent Schedule

The correct answer is: Master Schedule

Question 90

An array of assets--projects, programs, or other valuable and

often revenue-producingitems--that are grouped for
management convenience or strategic purpose is known as:

a. Program
b. Portfolio
c. Strategic Asset
d. Total Cost Management

The correct answer is: Portfolio

Question 91

The monetary sum expected from the disposal of an asset at

the end of its economic life, its useful life, or at the end of the
study period is known as:

a. Resale Value
b. Market Value
c. Book Value
d. Fair Value

The correct answer is: Resale Value

Question 92

Quality costs include all of the following EXCEPT:

a. Appraisal.
b. Prevention.
c. External failure.
d. Computer operations.

The correct answer is: Computer operations.

Question 93

Which of these terms is one of the three used to describe

contested changes and constructive changes where the
buyer and seller cannot agree on compensation for the
change, or cannot agree that a change has even occurred?

a. Forcing.
b. Mediation.
c. Complaints.
d. Disputes.

The correct answer is: Disputes.

Question 94

Class 4 and Class 3 estimate of AACE falls under which ANSI

Standard estimate

a. Definitive Estimate
b. Order of Magnitude
c. Ball Park
d. Budget Estimate

The correct answer is: Order of Magnitude

Question 95

Which of the following method is capable of approximating

economy of scale?

a. Physical Dimension Method

b. Work Breakdown structure
c. Capacity Factor method
d. End-Product Units methods

The correct answer is: Capacity Factor method

Question 96

Class 5 estimates can used for the following except

a. Early screening of estimate

b. Tender or Bidding
c. Evaluating the cost impacts design
d. General feasibility of a project

The correct answer is: Tender or Bidding

Question 97

Total Float for a critical activity is

a. 2 days
b. 0 day
c. 1 day
d. project duration

The correct answer is: 0 day

Question 98

If a financial institution charges 1% interest rate per month.

What is the effective annual interest rate?

a. 12.68%
b. 13%
c. 11.43%
d. 12%

The correct answer is: 12.68%

Question 99

Which motivational theory says that working conditions, salary,

and relationships at work do NOT improve motivation?

a. Maslow
b. Deming
c. McGregor
d. Herzberg

The correct answer is: Herzberg

Question 100

All of the following are disadvantage of cost reimbursable

contract EXCEPT:

a. final cost is unknown;

b. difficulties in evaluating proposals--strict comparison of the
amount quoted may not result in selecting the "best”
contractor or in achieving the lowest project cost;
c. owner carries most of the risks and faces the difficult
decisions; and,
d. owner can control all aspects of the work.

The correct answer is: owner can control all aspects of the work.
Question 101

Which of the following contracting arrangement is deployed

by the client to manage better coordination between design
professionals and the contractors?

a. Single Prime Contractor

b. Multiple Prime Contractor
c. Agency Construction Management
d. Design/Build

The correct answer is: Agency Construction Management

Question 102

A graphical presentation of project activities shown by a time-

scaled bar line is known as:

a. Bar Chart
b. Network Diagram
c. Milestone Chart
d. Histogram

The correct answer is: Bar Chart

Question 103

____________________ is a method of constructing a logic

network using nodes to represent the activities and
connecting them by lines that show logic relationships.

a. Precedence Diagramming Method

b. Arrow Diagramming Method
c. Network Diagram
d. Critical Path Method

The correct answer is: Precedence Diagramming Method

Question 104

Which of the following level of schedules displays a two-to-six

week look-ahead schedule that shows resource assigned,
detailed, and work activities, and is used for planning and
progress reporting purposes, review and assignment of current
week work plans, and advance planning for near-term future
week work?

a. Level 1
b. Level 2
c. Level 3
d. Level 4

The correct answer is: Level 4

Question 105

The amount of time that the completion of an activity can be

delayed without delaying the completion of the project's
terminal activity is called as:

a. Total Float
b. Free Float
c. Independent Float
d. Negative Float

The correct answer is: Total Float

Question 106

Slack is a synonym for:

a. Float
b. Lag
c. Buffer
d. Reserve

The correct answer is: Float

Question 107

A product-oriented family tree division of work to be

performed in accomplishing the project objective is known as:

a. Product breakdown structure

b. Work breakdown structure
c. Product analysis
d. Value analysis

The correct answer is: Work breakdown structure

Question 108

______________ is a written statement requesting additional

timeand/or money for acts or omissions during the
performance of the construction contract.

a. Change order
b. Claim
c. Change request
d. Compensation

The correct answer is: Claim

Question 109

A project manager for a large manufacturing concern is

working on a project that calls for a new building to be
constructed to house a new clean system manufacturing
process that is critical to the success of the project.
Construction is not a core competency of his company. His
team has the ability to create a detailed contract statement
of work with penalties if specific statements of work
deliverables are not met.

Q) Which of the following is best type of contract for this

situation?

a. Lump sum
b. Cost plus fixed fee
c. Cost plus incentive fee
d. Unit price contract

The correct answer is: Lump sum

Question 110

A project manager for a large manufacturing concern is

working on a project that calls for a new building to be
constructed to house a new clean system manufacturing
process that is critical to the success of the project.
Construction is not a core competency of his company. His
team has the ability to create a detailed contract statement
of work with penalties if specific statements of work
deliverables are not met.

Q) Which of the following contract type in which the owner

assumes major performance risk?

a. Lump sum
b. Cost plus fixed fee
c. Cost plus percentage of cost fee
d. Unit price

The correct answer is: Cost plus percentage of cost fee

Question 111

A project manager for a large manufacturing concern is

working on a project that calls for a new building to be
constructed to house a new clean system manufacturing
process that is critical to the success of the project.
Construction is not a core competency of his company. His
team has the ability to create a detailed contract statement
of work with penalties if specific statements of work
deliverables are not met.

Q) In which contract type the owner will have lease amount of

performance risk?

a. Lump sum
b. Cost plus fixed fee
c. Cost plus percentage of cost fee
d. Unit price

The correct answer is: Lump sum

Question 112

A project manager for a large manufacturing concern is

working on a project that calls for a new building to be
constructed to house a new clean system manufacturing
process that is critical to the success of the project.
Construction is not a core competency of his company. His
team has the ability to create a detailed contract statement
of work with penalties if specific statements of work
deliverables are not met.

Q) In a fixed price contract, the fee or profit is:

a. Set by the contractor, and it is unknown to the project

owner/client
b. Part of the negotiation involved in paying every invoice
c. Applied as a line item to every invoice
d. Determined with the other party at the end of the project

The correct answer is: Set by the contractor, and it is unknown

to the project owner/client
Question 113

A project manager for a large manufacturing concern is

working on a project that calls for a new building to be
constructed to house a new clean system manufacturing
process that is critical to the success of the project.
Construction is not a core competency of his company. His
team has the ability to create a detailed contract statement
of work with penalties if specific statements of work
deliverables are not met.

Q) Due to inexperience in construction, the construction

managers were introduced for this project. What is the role of
construction managers?

a. Coordinate with contractors

b. Coordination between contractor and sub-contractor
c. Coordinate with consultants
d. Coordinate between contractor and consultants

The correct answer is: Coordinate between contractor and

consultants
Question 114

A project manager for a large manufacturing concern is

working on a project that calls for a new building to be
constructed to house a new clean system manufacturing
process that is critical to the success of the project.
Construction is not a core competency of his company. His
team has the ability to create a detailed contract statement
of work with penalties if specific statements of work
deliverables are not met.

Q) The design & built contracting arrangement will:

a. Help expedite the project

b. Delay the project
c. Make construction managers job tedious
d. All of the above

The correct answer is: Help expedite the project

Question 115

A project manager for a large manufacturing concern is

working on a project that calls for a new building to be
constructed to house a new clean system manufacturing
process that is critical to the success of the project.
Construction is not a core competency of his company. His
team has the ability to create a detailed contract statement
of work with penalties if specific statements of work
deliverables are not met.

Q) In a cost plus fixed fee contract, how can the fee change?

a. It cannot change
b. It can change if change orders are issued
c. It can only be increased by 10 percent if there is an
unexpected cost overrun
d. It can be decreased under certain circumstances

The correct answer is: It can change if change orders are

issued
Question 116

You have received the best employee of the month award;

this would most likely satisfy which level of your need?

a. Esteem Need
b. Physiological Need
c. Self-Actualization Need
d. Social Need

The correct answer is: Self-Actualization Need

Question 117

Constructability analysis is different from construction Pre-

Planning in that Constructability analysis focuses on all the
following EXCEPT:

a. Technology options
b. Installation methods
c. Field operation
d. Site access

The correct answer is: Site access

Question 118

Typically, most contracts provide a disputes clause. The four

basic methods of resolving disputes on projects are:

a. Mediation, arbitration, litigation, and court appeal

b. Negotiation, mediation, arbitration, and litigation
c. Arbitration, dispute review board, negotiation and litigation
d. Mediation, step negotiations, non-binding mediation and
litigation

The correct answer is: Negotiation, mediation, arbitration, and

litigation
Question 119

The following three tasks form the entire critical path of the
project network. The three estimates of each of these tasks are
tabulated below. How long would the project take to
complete expressed with an accuracy of one standard
deviation?

Task Optimistic Most likely Pessimistic

A 15 25 47
B 12 22 35
C 16 27 32

a. 75.5
b. 75.5 +/- 7.09
c. 75.5 +/- 8.5
d. 75.5 +/- 2.83

The correct answer is: 75.5 +/- 7.09

Question 120

An example of a ''soft logic'' dependency, as opposed to

''hard logic'' dependency, is:

a. Project A, the company's participation in a Pump Industry

trade show, depends on the successful completion of Project
B, which is building the prototype pump that is going to be
displayed.
b. To install the plumbing and electrical work at the same time
on a single-family dwelling.
c. For the shrink-wrapping on the finished box of software to
depend on enclosing the manual and software first.
d. To schedule the final testing activity of a computer to start
seventy-two hours after the start of the mandatory seventy-two
hour ''burn-in'' period.

The correct answer is: To install the plumbing and electrical

work at the same time on a single-family dwelling.