AACE CCT STUDY SHEET 2026 UPDATED
QUESTIONS AND SOLUTIONS
◉ Forced Liquidation Value.
Answer: value of equipment in terms of money that can be derived
from a properly advertised and conducted auction where time is of
the essence (also referred to as "under the hammer" or "blow-out"
value) [S&K 5th Ed.]
◉ Salvage Value/Part-Out Value.
Answer: value of equipment in terms of money that a buyer will pay
to a seller, recognizing the component value of parts of the
equipment that can be used or resold to end-users, usually for repair
or replacement purposes
[S&K 5th Ed., 6.2].
◉ Scrap Value.
Answer: is the value of equipment in terms of money that relates to
the equipment's basic commodity value [S&K 5th Ed.,6.2].
◉ Book Value (NET).
Answer: (1) Current investment value on the books calculated as
original value less
,depreciated accruals.
(2) New asset value for accounting use.
(3) The value of an outstanding share of stock of a corporation at
any one
time, determined by the number of shares of that class outstanding
[RP10S-90].
◉ Residual or Economic Value.
Answer: The value of property in view of all its expected economic
uses, as distinct
from its value in view of any particular use. Also, economic value
reflects
the importance of a property as an economic means to an end,
rather
than as an end in itself [RP10S-90].
◉ Operating Cost.
Answer: The expenses incurred during the normal operation of a
facility, or
component, including labor, materials, utilities, and other related
costs.
Includes all fuel, lubricants, and normally scheduled part changes in
order
to keep a subsystem, system, particular item, or entire project
,functioning. Operating costs may also include general building
maintenance, cleaning services, taxes, and similar items [RP10S-90].
◉ Temporary Equipment:.
Answer: expensed items for construction, maintenance, etc)
◉ Labor Burden.
Answer: Taxes and insurances the employer is required to pay by
law based on
labor payroll, on behalf of or for the benefit of labor. (In the US these
are federal old age benefits, federal unemployment insurance tax,
state
unemployment tax, and worker's compensation) [RP10S-90].
◉ Bare Labor.
Answer: Gross direct wages paid to the worker
◉ Burdened Labor.
Answer: Gross direct wages paid to the worker, plus labor burden
◉ All in Labor.
Answer: Gross direct wages paid to the worker, plus labor burden,
plus field
, indirects, plus general & administrative costs, plus profit [RP10S-
90].
◉ Exempt Employees.
Answer: Employees exempt from overtime compensation by federal
wage and
hours guidelines [RP10S-90].
◉ Non-Exempt Employees.
Answer: Employees not exempt from overtime compensation by US
federal wage
and hours guidelines [RP10S-90].
◉ General and Administrative Costs (G&A).
Answer: The fixed cost incurred in the operation of a business. G&A
costs are also
associated with office, plant, equipment, staffing, and expenses
thereof,
maintained by a contractor for general business operations. G&A
costs are not specifically applicable to any given job or project
[RP10S-90].
◉ Gross Profit.
Answer: Earnings from an on-going business after direct and project
QUESTIONS AND SOLUTIONS
◉ Forced Liquidation Value.
Answer: value of equipment in terms of money that can be derived
from a properly advertised and conducted auction where time is of
the essence (also referred to as "under the hammer" or "blow-out"
value) [S&K 5th Ed.]
◉ Salvage Value/Part-Out Value.
Answer: value of equipment in terms of money that a buyer will pay
to a seller, recognizing the component value of parts of the
equipment that can be used or resold to end-users, usually for repair
or replacement purposes
[S&K 5th Ed., 6.2].
◉ Scrap Value.
Answer: is the value of equipment in terms of money that relates to
the equipment's basic commodity value [S&K 5th Ed.,6.2].
◉ Book Value (NET).
Answer: (1) Current investment value on the books calculated as
original value less
,depreciated accruals.
(2) New asset value for accounting use.
(3) The value of an outstanding share of stock of a corporation at
any one
time, determined by the number of shares of that class outstanding
[RP10S-90].
◉ Residual or Economic Value.
Answer: The value of property in view of all its expected economic
uses, as distinct
from its value in view of any particular use. Also, economic value
reflects
the importance of a property as an economic means to an end,
rather
than as an end in itself [RP10S-90].
◉ Operating Cost.
Answer: The expenses incurred during the normal operation of a
facility, or
component, including labor, materials, utilities, and other related
costs.
Includes all fuel, lubricants, and normally scheduled part changes in
order
to keep a subsystem, system, particular item, or entire project
,functioning. Operating costs may also include general building
maintenance, cleaning services, taxes, and similar items [RP10S-90].
◉ Temporary Equipment:.
Answer: expensed items for construction, maintenance, etc)
◉ Labor Burden.
Answer: Taxes and insurances the employer is required to pay by
law based on
labor payroll, on behalf of or for the benefit of labor. (In the US these
are federal old age benefits, federal unemployment insurance tax,
state
unemployment tax, and worker's compensation) [RP10S-90].
◉ Bare Labor.
Answer: Gross direct wages paid to the worker
◉ Burdened Labor.
Answer: Gross direct wages paid to the worker, plus labor burden
◉ All in Labor.
Answer: Gross direct wages paid to the worker, plus labor burden,
plus field
, indirects, plus general & administrative costs, plus profit [RP10S-
90].
◉ Exempt Employees.
Answer: Employees exempt from overtime compensation by federal
wage and
hours guidelines [RP10S-90].
◉ Non-Exempt Employees.
Answer: Employees not exempt from overtime compensation by US
federal wage
and hours guidelines [RP10S-90].
◉ General and Administrative Costs (G&A).
Answer: The fixed cost incurred in the operation of a business. G&A
costs are also
associated with office, plant, equipment, staffing, and expenses
thereof,
maintained by a contractor for general business operations. G&A
costs are not specifically applicable to any given job or project
[RP10S-90].
◉ Gross Profit.
Answer: Earnings from an on-going business after direct and project
