AACE International CCP Exam - Topic 5 Question 33 Discussion

Actual exam question for AACE International's CCP exam

Question #: 33
Topic #: 5

An agricultural corporation that paid 53% in income tax wanted to build a grain elevator designed to last twenty-five (25) years at a cost of $80,000 with no salvage value. Annual income generated would be $22,500 and annual expenditures were to be $12,000.

Answer the question using a straight line depreciation and a 10% interest rate.

The following question requires your selection of CCC/CCE Scenario 17 (4.2.50.1.1) from the right side of your split screen, using the drop down menu, to reference during your response/choice of responses.

Present worth calculations is represented by which of the following equations?

AOption A

BOption B

COption C

DOption D

Show Suggested Answer

Suggested Answer: D

Given Scenario:

The question involves selecting the correct formula for present worth calculations.

The present worth (or present value) formula is typically represented by: PV=FV(1+i)nPV = frac{FV}{(1 + i)^n}PV=(1+i)nFV which is equivalent to Option D.

by Eun at Oct 20, 2025, 02:40 AM

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Ronnie

2 months ago

I hope we get more practice on this topic!

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Jesus

3 months ago

I prefer Option A. It matches my calculations.

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Jackie

3 months ago

I feel confused about the equations.

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Stephaine

3 months ago

Totally agree, the numbers seem off here!

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Deja

3 months ago

Wait, how can they make a profit with those expenses?

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Cristina

3 months ago

53% tax rate is pretty high for a corporation.

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Roslyn

3 months ago

Gotta love that 10% interest rate!

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Alva

4 months ago

The grain elevator costs $80,000 and lasts 25 years.

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Ozell

4 months ago

Wait, is this a trick question? I'm going with Option B, just to be safe.

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Norah

4 months ago

Haha, this question is a real head-scratcher! I'll go with Option C just to be different.

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Josephine

4 months ago

Option A seems like the way to go here.

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Roslyn

4 months ago

I'm pretty sure the answer is Option D.

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Jenelle

4 months ago

Whoa, this is a lot of information to process. I better take a deep breath and read through it carefully. I don't want to rush and miss something important. Okay, let's see what I can do.

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Georgeanna

5 months ago

I think it's about understanding depreciation.

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Tamar

5 months ago

Option B looks good to me.

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Lauran

5 months ago

This question is tricky!

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Madelyn

5 months ago

I lean towards Option B. It seems right.

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Daren

6 months ago

This seems straightforward enough. I just need to identify the right formula from the options and plug in the numbers. As long as I don't make any silly mistakes, I should be able to get the right answer.

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Yuonne

6 months ago

Alright, time to put on my problem-solving hat. I remember learning about present worth calculations in class, so I'll start there and see if I can figure out which equation applies best to this scenario.

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Cassie

6 months ago

Okay, let's see. We have an agricultural corporation, a grain elevator project, and some financial data. I think I can work through this, but I'll need to double-check the depreciation and interest rate calculations.

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Quentin

6 months ago

Hmm, this looks like a tricky one. I'll need to carefully review the information provided and the formulas to make sure I understand how to approach this.

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Joanna

1 month ago

I think we need to focus on the present worth calculations first.

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Gary

2 months ago

I agree! The depreciation and interest rate make it tricky.

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Fernanda

2 months ago

This is definitely a complex scenario.

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Elin

5 months ago

Let’s break down the options and see which one fits best.

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Madalyn

6 months ago

I’m uncertain about the impact of the 10% interest rate on the overall calculations. I hope I can remember the right steps when I look at the options.

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Slyvia

7 months ago

I feel like I’ve seen this equation format before in our practice tests. I just need to recall which option corresponds to present worth calculations.

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Lezlie

7 months ago

I think the straight-line depreciation will help simplify the cash flow analysis, but I’m a bit confused about how to apply the interest rate here.

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Rosendo

7 months ago

I remember we practiced a similar question about calculating present worth, but I’m not sure if I got the formula right for this one.

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