Question 1

The operating cost in the first year is $100,000. Escalation is expected to be 3% per year. What is the estimated operating cost in the fifth year?

Options :

A : $112,551

B : $112,000

C : $100,000

D : $115,000

Answer: A

Question 2

If you suspect a contractor’s bid estimate is unbalanced, which of the following best describes what to look for in an estimate review?

Options :

A : Errors and omissions concentrated in only a few elements of the work breakdown or cost account structure

B : Items that will be purchased or installed early and seem to have very high cost values

C : Extremely high escalation costs, particularly for those items installed later in the project schedule

D : Allowances for overtime that on balance appear to be excessive

Answer: B

Question 3

The all‐in labor cost of a welder (excluding a welding machine) is $60 per hour. The welding machine rental cost is $220 per hour. A welding crew is comprised of two (2) welders and one (1) welding machine. Assume each weld takes two (2) crew hours to complete. What is the cost of completing 20 welds?

Options :

A : $3,400

B : $13,600

C : $11,200

D : $680

Answer: B

Question 4

As a cost professional, you are requested to perform project screening in ten minutes. Which one of following projects is worthy of further review?

Options :

A : Project B requires $30 million investment, resulting in $14 million in benefits

B : Project A requires $50 million investment, resulting in $20 million in benefits

C : Project C requires $40 million investment, resulting in $15 million in benefits

D : Project D requires $20 million investment, resulting in $3 million in benefits

Answer: A

Question 5

The following is the result of the range estimating analysis. If you wish to be 80% certain of not over running the estimate, how much contingency should you add?

Options :

A : ($25)

B : $80

C : It cannot be determined from the table

D : $328

Answer: D