CCP VCE Exam Download

Based on the provided financials, the truck results in a positive net income after accounting for all expenses, including depreciation and taxes. Since the truck meets the desired 10% return on investment,the most financially sound decision would be topurchase the truck. This conclusion assumes the cash flows and return analysis align with the management's required rate of return.

To calculate the capital recovery costs for the new press machine, which includes the salvage value, the correct method is to use the approach inOption B:

Annual Depreciation:This represents the cost of the equipment spread over its useful life.

Annual Equivalent Interest:This accounts for the interest on the capital cost over time, which is necessary when considering the cost of capital.

Thus, the correct formulas provided inOption Bare:

(1) C.R. = annual depreciation + annual equivalent interest

(2) C.R. = P(A/P, i%, N) - F(A/F, i%, N)

These formulas are typically used in engineering economics to assess capital recovery when both depreciation and interest are considered, along with the salvage value. Therefore, the correct answer isB. Option B.

In the benefit/cost (B/C) method of analysis, the criterion for determining whether a proposed project is acceptable is if the Benefit/Cost ratio (B/C) is greater than 1.0. This indicates that the benefits of the project outweigh the costs, thus making the project economically viable. A B/C ratio of exactly 1.0 suggests that the benefits are just sufficient to cover the costs, while a ratio greater than 1.0 indicates a profitable investment.

Anactivityis a fundamental unit of work that must be performed over a specific period to complete a project. In project management, activities are the individual tasks or components that make up the project's work breakdown structure (WBS). Each activity is defined by its duration, required resources, and dependencies on other activities.

Activities are the building blocks of a project schedule, and understanding them is crucial for effective project planning, scheduling, and execution. By breaking down a project into activities, project managers can better estimate time and resources, monitor progress, and make adjustments as necessary to keep the project on track.