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NO.1 An agricultural corporation that paid 53% in income tax wanted to build a grain elevator
designed to last twenty-five (25) years at a cost of $80,000 with no salvage value. Annual income
generated would be $22,500 and annual expenditures were to be $12,000.
Answer the question using a straight line depreciation and a 10% interest rate.
How many years will it take to earn $400 in interest on $800 at 4% compounded annually?
A. 11 years
B. 10 years
C. 12 years
D. 13 years
Answer: B

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NO.2 Cost performance index (CPI) is defined by AACE International as: (assume no change in
budgeted quantities)
A. BCWS/BCWP
B. ACWP/BCWP
C. ACWP/BCWS
D. BCWP/ACWP
Answer: D

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