Free AACE International CCP Practice Exam with Questions & Answers | Set: 6

Termination of Contract for Convenienceis a clause in a contract that allows the owner or the principal to terminate the contract at their discretion, irrespective of the general contractor's liability or performance. This type of termination does not require the contractor to be in breach of contract; it allows the owner to end the contract for reasons such as changes in project scope, funding issues, or strategic decisions. While the contractor is typically entitled to compensation for work completed up to the termination, they may not be entitled to the full profit expected if the contract were completed.

Cost reductionis not a specific phase in the value engineering process. The five phases of value engineering are:

Information gathering: Collecting relevant data.

Creative: Brainstorming ideas for potential improvements.

Evaluation: Assessing the feasibility and impact of ideas.

Development: Refining the selected ideas into actionable solutions.

Presentation: Proposing the best solution to stakeholders.

While cost reduction is an overall goal of value engineering, it is not a distinct phase in the process.

Since the truck is being depreciated using the straight-line method over five years with no salvage value, the book value of the truck at the end of the five-year useful life will be$0. This means the entire cost of the truck would have been fully depreciated by the end of the five years.

Quantitative datarefers to data that can be measured and expressed numerically. This type of data is often described using statistical methods, graphs, charts, and numerical summaries. It is distinct from qualitative data, which is descriptive and categorical. Thus, the most accurate description is thatQuantitative data can be described graphically or numerically.

Total Cost Management (TCM) is a holistic approach that involves the application of practices and processes to manage the total life cycle costs of a portfolio of strategic assets. This concept extends beyond individual project management to encompass the entire investment life cycle, from initial planning and design through to operation, maintenance, and eventual decommissioning or replacement of assets. TCM aims to optimize the total cost of ownership and ensure that resources are allocated efficiently over the long term.

Option Arefers to a specific method for quantifying construction damages, not the broad concept of TCM.

Option Cdescribes a job cost system, which is a narrower focus than TCM.

Option Dincorrectly states that TCM does not link to project management, resource management, or accounting, which are integral to TCM.

Therefore,Bis the correct answer as it best describes the comprehensive and life cycle-oriented nature of Total Cost Management.

Given Scenario:

A major theme park is in the preliminary stages of construction, requiring detailed estimation for costs involving new technology.

Steps:

Identify what information is needed for a Class 2 definitive estimate.

Class 2 estimates are more detailed and require specific data, including soil data, detailed construction drawings, and quantity takeoffs.

Answer:A. Soil data, detailed construction drawings, quantity takeoffs, minimum contingency detailed indirect costs, detailed engineering estimates