CCE Exam Preparation V1.

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Part 2 – Cost Estimating and Control – Closed Book

1. The estimated current price for a unit of machine is Dhs.1.5 Million. The machine has the following commodities
and it share of total cost is:

Commodity Share
Iron 30 %
Copper 30%
Zinc 20%
Labor 20%

The following are the escalation rate for the above commodity for the next 5 years:

Escalation Rate
Commodity Index Year 1 Year 2 Year 3 Year 4 Year 5
Iron 3.7 13% 11% 10% 8% 14%
Copper 2.4 11% 10% 8% 11% 10%
Zinc 1.8 5% 9% 4% 11% 10%
Labor 8.9 3% 10% 8% 4% 12%

Answer the following questions, based on the above scenario:

1. What will be the cost of this machine at the end of year 4?

a) 2.1 Million
b) 1.9 Million
c) 2.0 Million
d) 2.2 Million

2. After 5 Years which commodity pose the highest cost increase (in percentage) over today’s commodity price?
a) Iron
b) Copper
c) Zinc
d) Labor

3. What is the cost of Zinc for the machine today?

a) 450000
b) 300000
c) 320000
d) 400000

4. At the end of year 3, what is the projected cost of the machine?

a) 1.9 Million
b) 2.0 Million
c) 1.8 Million
d) 1.7 Million

5. If the iron cost AED 12000 per ton at the end of year 4, what is the price of iron at the end of year 5?
a) 13680
b) 12680
c) 14680
d) 11680

6. At the end of 40 months, what will be escalated price of Labor?

a) 382000
b) 367000
c) 427000
d) 339900

7. What is the index value of copper at the end of year 1?

a) 2.664
b) 2.554
c) 2.332
d) 2.412
 CCE Exam Preparation V1.0
Part 2 – Cost Estimating and Control – Closed Book

2. You have recently completed a 750 MW power plant with the total cost of AED 270 Million. You have been
assigned to prepare a ball park estimate for new 870 MW power plant. Historical information suggests you to use .60
exponent.

Based on this scenario, answer the following questions:

1. What is the most relevant technique to use for this scenario?

a) Physical Dimension Method
b) Ratio or Factor Methods
c) Parametric Method
d) Capacity Factor Method

2. What is the equation for Capacity Factor Method?

a) $B = ($A) (CapB / CapA)e
b) $A = ($B) (CapB / CapA)e
c) $A = ($B) (CapB / CapA)e
d) $B = ($A) (CapA / CapB)e
3. What is the exponent range typically used for Capacity Factor Method?
a) 0.4 to 0.89
b) 0.5 to 0.85
c) 0.6 to 0.78
d) 0.1 to 1.0

4. As per AACE International classification, this estimation will provide you with what class of accuracy?
a) Class 5
b) Class 4
c) Class 3
d) Class 2

5. What will be new plant cost based on e=.70?

a) 300 Million
b) 290 Million
c) 301 Million
d) 333 Million

6. If the new project doesn’t have some scope worth 50 Million, which you have completed in the last project, what
will be new project cost?
a) 240 Million
b) 244 Million
c) 248 Million
d) 241 Million

7. If the exponent / proration factor increases, what will be the effect on new project cost?
a) There will be a further increase in new project cost
b) There will be a further decrease in new project cost
c) There will be no effect on new project cost
d) None of the above
 CCE Exam Preparation V1.0
Part 2 – Cost Estimating and Control – Closed Book

3. Answer the following 7 questions, based on the AACEI Estimation Classification.

1. If the level of project definition is only 8%, what class of estimation you can prepare?
a) Class 5
b) Class 4
c) Class 3
d) Class 2

2. The probable cost of a new project to be estimated is AED 150 Million, what will be approximate cost of preparing
estimate for this project, if you want a ball park figure?
a) 6500
b) 7500
c) 8000
d) 1000

3. An accuracy range of -15% to + 30% for a process industry falls under which class of estimate?
a) Class 1 – Definitive Estimate
b) Class 2 – Definitive Estimate
c) Class 3 - Budget Estimate
d) Class 4 – ROM Estimate

4. If you want to prepare estimation for bidding purpose, what class of estimate would you suggest?
a) Class 3 – Budget Estimate
b) Class 5 – ROM
c) Class 2 – Definitive Estimate
d) Class 4 – Budget Estimate

5. As per AACEI standard, ANSI’s Budget Estimate falls under what class of estimate?
a) Class 5 & 4
b) Class 4 & 3
c) Class 3 & 2
d) Class 2 & 1

6. Which of the following is not necessary to classify the estimate as per AACEI Standard?
a) Degree of project definition
b) End use of the estimate
c) Estimating Accuracy
d) Government Mandated accuracy

7. Which estimate requires least amount of effort to prepare?

a) ROM
b) Definitive Estimate
c) Budget Estimate
d) Control Estimate
 CCE Exam Preparation V1.0
Part 2 – Cost Estimating and Control – Closed Book

1. As a contractor what class of estimation you would prefer for lump sum contract?
a) Class 3
b) Class 4
c) Class 5
d) Class 1

2. The hotel just completed included 200 guest rooms, as well as restaurants, meeting rooms, parking garage, and
night club. The total construction cost for the 200 room was AED 240 Million.

Using End-Product Units Method, what will be the estimated cost of new hotel with the 240 guest rooms with more or
less similar facilities?
a) 298 Million
b) 288 Million
c) 308 Million
d) 312 Million

3. The Lagoon Park Project was to grade and pave a sidewalk around a pond in the community park. The sidewalk
of Lagoon Park was 1,048 feet by 6 feet, used a textured surface, had some curves around trees, and cost Dhs. 75,287
to complete.

The current project, King Park, will have a similar surface and will cover 4,500 feet by 6 feet. What will be cost of
King Park, based on physical dimension estimation technique?
a) AED 323,190
b) AED 310,233
c) AED 295,000
d) AED 398,000

4. You have recently completed (Year 2007) a 150,000 BBL / Day LPG plant with the cost 500 Million in Abu Dhabi,
UAE. Prepare an estimated cost for 90,000 BBL / Day LPG to be built in Ajman, UAE for a period of 2 years.

Adjustment factor:
a) Plant in Ajman doesn’t require some specification worth 50 Million which was complete in Abu Dhabi Plant.
b) Construction in Ajman cost 1.1 times more than construction in Abu Dhabi, due to soil condition.
c) Escalation for 2 years will be 5% for the first year and 4% for the second year.
d) Recent history shows a capacity factor of 0.75 is appropriate for this facility.

What will be the cost of new plant in Ajman?

a) 369 Million
b) 388 Million
c) 791 Million
d) I give up!!!

5. Based on the data in question 4, if the Ajman plant has a pollution requirement which will cost 7 Million, what is
the new estimated cost?
a) 376 Million
b) 395 Million
c) 373 Million
d) 439 Million