AACE International Exam CCP Topic 6 Question 21 Discussion

Actual exam question for AACE International's CCP exam

Question #: 21
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%.

Student will receive scholarship when the GPA is within top 2%. The mean GPA is 2.8 and standard deviation is 0.5.

How high must the GPA be to qualify for the scholarship?

A3.62

B3.35

C3.91

D3.83

Show Suggested Answer

Suggested Answer: A

To find the GPA that qualifies for the top 2%, we use the inverse of the standard normal distribution (Z-table). The Z-score corresponding to the top 2% is approximately 2.05. Given the mean GPA is 2.8 with a standard deviation of 0.5, we calculate the threshold GPA as follows:

GPA=+Z=2.8+2.050.5=2.8+1.025=3.62\text{GPA} = \mu + Z \times \sigma = 2.8 + 2.05 \times 0.5 = 2.8 + 1.025 = 3.62GPA=+Z=2.8+2.050.5=2.8+1.025=3.62

Thus, a GPA of 3.62 is needed to qualify for the scholarship.

by Asarudeen at Feb 14, 2025, 04:03 PM

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22 days ago

I think the answer is B) 3.35. That's the only option that makes sense given the information provided.

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Rebbecca

1 days ago

I agree, option B) 3.35 seems to be the correct answer based on the information given.

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Stefania

22 days ago

Hmm, I'm not sure about this one. The question seems a bit confusing. I'm going to go with C) 3.91 just to be safe.

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Kris

22 days ago

I think the GPA must be at least 3.62 to qualify for the scholarship.

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