Discuss AACE International CCP Exam Topic 1 Question 29

The following question requires your selection of CCC/CCE Scenario 4 (2.7.50.1.1) from the right side of your split screen, using the drop down menu, to reference during your response/choice of responses.

At the end of 30 months, the final price for the piece of equipment will be:

A$328,810

B$370,710

C$375,658

D$378,750

Suggested Answer: D

Steel:

Year 1 inflation: 2.5%

Year 2 inflation: 2.5%

Year 3 inflation: 3.0%

Total cumulative inflation for Steel over 2.5 years: CumulativeInflation=(1+0.025)(1+0.025)(1+0.03)=1.0251.0251.03=1.0806251.031.11304text{Cumulative Inflation} = (1 + 0.025) times (1 + 0.025) times (1 + 0.03) = 1.025 times 1.025 times 1.03 = 1.080625 times 1.03 approx 1.11304CumulativeInflation=(1+0.025)(1+0.025)(1+0.03)=1.0251.0251.03=1.0806251.031.11304

Steel cost component: 0.3 times $350,000 = $105,000

Adjusted cost: $105,000 times 1.11304 $116,869.20

Copper:

Year 1 inflation: 1.0%

Year 2 inflation: 1.5%

Year 3 inflation: 2.0%

Total cumulative inflation for Copper over 2.5 years: CumulativeInflation=(1+0.01)(1+0.015)(1+0.02)=1.011.0151.021.045151.021.0651text{Cumulative Inflation} = (1 + 0.01) times (1 + 0.015) times (1 + 0.02) = 1.01 times 1.015 times 1.02 1.04515 times 1.02 1.0651CumulativeInflation=(1+0.01)(1+0.015)(1+0.02)=1.011.0151.021.045151.021.0651

Copper cost component: 0.3 times $350,000 = $105,000

Adjusted cost: $105,000 times 1.0651 $111,835.50

Manufacturing Labor:

Year 1 inflation: 2.5%

Year 2 inflation: 3.0%

Year 3 inflation: 3.5%

Total cumulative inflation for Manufacturing Labor over 2.5 years: CumulativeInflation=(1+0.025)(1+0.03)(1+0.035)=1.0251.031.0351.056251.0351.09138text{Cumulative Inflation} = (1 + 0.025) times (1 + 0.03) times (1 + 0.035) = 1.025 times 1.03 times 1.035 1.05625 times 1.035 1.09138CumulativeInflation=(1+0.025)(1+0.03)(1+0.035)=1.0251.031.0351.056251.0351.09138

Labor cost component: 0.4 times $350,000 = $140,000

Adjusted cost: $140,000 times 1.09138 $152,793.20

Final Price:

FinalPrice=116,869.20+111,835.50+152,793.20381,497.90text{Final Price} = 116,869.20 + 111,835.50 + 152,793.20 381,497.90FinalPrice=116,869.20+111,835.50+152,793.20381,497.90

The closest option: Answer: D. $378,750

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29 comments · newest first

Pa 10 months ago

Yeah, I agree with Crista on this one!

Isidra 10 months ago

Wait, how did we get to $378,750? Seems high!

Paulina 10 months ago

Definitely going with option C, $375,658.

Crista 11 months ago

I think the final price is $370,710.

Lenita 11 months ago

Is there a breakdown of how these prices were calculated?

Reita 11 months ago

I’m struggling to remember the exact formula we used. I think it was something like option B, but I could be mixing it up with another question.

Dong 11 months ago

I recall that in one of our practice scenarios, the final price was influenced by additional fees. I should check the details in Scenario 4 again.

Lakeesha 12 months ago

I'm not entirely sure about the calculations, but I feel like the final price should be higher than $370,000. Maybe option D?

Tyisha 12 months ago

I remember we practiced a similar question about calculating final prices based on depreciation and interest rates. I think I might lean towards option C.

Dominga 1 year ago

No problem, I've got this. I'll just reference the scenario and do the math. Easy peasy!

Lettie 1 year ago

Whoa, this is a tricky one. I better take my time and make sure I understand all the variables before selecting an answer.

Johnetta 1 year ago

I've got this! I just need to plug the numbers into the formula and I'll have the answer in no time.

Lamar 1 year ago

Hmm, this seems like a straightforward calculation, but I want to double-check the details in the scenario to make sure I don't miss anything.

Clarence 1 year ago

Okay, let me think this through. I'll need to reference the CCC/CCE Scenario 4 (2.7.50.1.1) to determine the final price based on the given information.

Norah 1 year ago

Ha! I bet the right answer is 'D) None of the above.' These certification exams are always trying to trick you. I'm just going to go with my gut and pick the most outrageous option.

Lon 1 year ago

I don't know, man. This whole 'CCC/CCE Scenario 4 (2.7.50.1.1)' thing is giving me a headache. Why can't they just ask a simple question without all the jargon?

Daren 1 year ago

I believe the answer is D) $378,750 based on my calculations.

German 1 year ago

I'm going with C) $375,658. It's a nice, round number that seems more realistic than the other options. Plus, who comes up with these weird, specific prices anyway?

Launa 1 year ago

↳ replying to German

I agree with you, C) $375,658 does seem like a more realistic option compared to the others.

Geoffrey 1 year ago

↳ replying to German

I'm leaning towards D) $378,750. It just sounds like a more accurate final price to me.

Adela 1 year ago

↳ replying to German

I think I'll go with A) $328,810. It seems like a reasonable price for the equipment.

Justine 1 year ago

I'm not sure, but I think it might be C) $375,658.

Roxanne 1 year ago

Hmm, I'm not so sure. D) $378,750 looks more reasonable to me. That extra $8,000 could account for some unexpected maintenance or inflation over that 30-month period.

Shawna 1 year ago

I think the answer is B) $370,710. The question mentions the 'final price' after 30 months, so that's probably the total cost including any interest or fees.

Felix 1 year ago

↳ replying to Shawna

I believe the correct answer is D) $378,750.

Rickie 1 year ago

↳ replying to Shawna

I'm not sure, but I think it might be C) $375,658.

Nu 1 year ago

↳ replying to Shawna

I agree with you, I also think the answer is B) $370,710.

Irving 1 year ago

I agree with Denny, B) $370,710 seems like the correct choice.

Denny 1 year ago

I think the answer is B) $370,710.

AACE International CCP Exam - Topic 1 Question 29 Discussion