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AACE International CCP Exam - Topic 6 Question 14 Discussion

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%.All of the following are characteristics of standard normal distribution, except:
A) means and median are not equal
B) about 68% of its value is within one standard deviation
C) the total area underneath the curve is 1
D) the curve shape is symmetrical

AACE International CCP Exam - Topic 6 Question 14 Discussion

Actual exam question for AACE International's CCP exam
Question #: 14
Topic #: 6
[All CCP Questions]

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%.

All of the following are characteristics of standard normal distribution, except:

Show Suggested Answer Hide Answer
Suggested Answer: A

The statement that the 'means and median are not equal' is incorrect for a standard normal distribution. In a standard normal distribution, the mean, median, and mode are all equal, as the distribution is perfectly symmetrical. The correct characteristics of a standard normal distribution are that approximately 68% of the values fall within one standard deviation of the mean, the total area under the curve is 1, and the curve shape is symmetrical.


by Stephanie at Nov 14, 2024, 11:19 PM

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Precious
7 months ago
Standard normal distribution has a total area of 1, that's a fact!
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Ranee
7 months ago
Yup, B, C, and D are all true for normal distributions.
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Tiffiny
7 months ago
Wait, are we sure about the 68% thing? Seems off.
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Jacqueline
8 months ago
Totally agree, A is definitely the odd one out here.
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Gilbert
8 months ago
The means and median are equal in a normal distribution.
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Barbra
8 months ago
I'm a bit confused about the percentages related to standard deviations. I know about the 68% rule, but I can't recall if it applies here.
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Bok
8 months ago
I practiced a similar question about the characteristics of distributions, and I feel like the symmetry of the curve is a key point.
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Mendy
8 months ago
I think option A is definitely the one that doesn't belong because the mean and median should be equal in a standard normal distribution, right?
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Jani
9 months ago
I remember studying the properties of normal distribution, but I'm not completely sure if the mean and median are always equal.
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Audra
9 months ago
Alright, let's do this! I'm pretty confident in my ability to work through these types of finance and statistics problems. I'll make sure to show all my work and double-check my answers before submitting.
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Brandee
9 months ago
This looks like a tricky one, but I think I can handle it. I'll start by breaking down the financial information and calculating the net present value of the truck purchase. Then I'll review the standard normal distribution characteristics and identify the one that doesn't apply.
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Felicia
9 months ago
Hmm, I'm a bit confused by the wording of the question. It seems to be asking about characteristics of the standard normal distribution, but the details provided are about a concrete pumping truck purchase. I'll need to make sure I understand how these two parts are connected.
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Ammie
9 months ago
Okay, this looks like a pretty complex question involving financial calculations and standard normal distribution. I'll need to carefully read through the details and think through the steps to solve this.
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Audrie
2 years ago
Haha, this question is a piece of cake! Everyone knows that the mean and median are not equal in a standard normal distribution.
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Pearly
1 year ago
D) the curve shape is symmetrical
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Annamae
1 year ago
C) the total area underneath the curve is 1
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Clay
1 year ago
B) about 68% of its value is within one standard deviation
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Kallie
1 year ago
A) means and median are not equal
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Kattie
2 years ago
I believe the answer is A) means and median are not equal because in a standard normal distribution, the mean and median are always equal.
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Ronald
2 years ago
I agree, I'm not sure about the characteristics of standard normal distribution.
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Makeda
2 years ago
I think the question about standard normal distribution is tricky.
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Sylvia
2 years ago
I'm pretty sure D is the correct answer. The curve shape in a standard normal distribution is symmetrical.
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Wynell
2 years ago
C sounds right to me. The total area under the curve is 1 for a standard normal distribution.
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Carylon
2 years ago
I think the answer is A. The mean and median are not equal in a standard normal distribution.
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Ula
2 years ago
D) the curve shape is symmetrical
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Bettye
2 years ago
C) the total area underneath the curve is 1
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Jeannetta
2 years ago
Yes, the mean and median are not equal in a standard normal distribution.
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Carmelina
2 years ago
That's correct, the mean and median are not equal in a standard normal distribution.
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Chantell
2 years ago
B) about 68% of its value is within one standard deviation
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Benton
2 years ago
I agree, the mean and median are not equal in a standard normal distribution.
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Kaitlyn
2 years ago
A) means and median are not equal
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