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Project Management Question Paper
Project Management
Course:Bachelor Of Commerce
Institution: University Of Nairobi question papers
Exam Year:2012
University of Nairobi
School of Business
Department of Management Science
DOM 402: PROJECT MANAGEMENT
NAIROBI BCOM MOD II DAY
25TH JUNE, 2012
Continuous Assessment Test Time: 11:00 AM – 12:30 PM
Attempt all questions. Give concise relevant answers with illustrations and examples where appropriate.
Question 1
a) Explain the need for tradeoffs in project constraints during project implementation, and why project management is considered an ‘art’. (5 marks)
b) According to one newspaper article, a weakness in project management is one of the greatest problems the Kenyan public service is facing in achieving acceptable levels of public service delivery. Discuss why this could be so with appropriate examples of the role of projects in national developmentandpublic services delivery. (10 marks)
Question 2
a) Compare and contrast a cost-benefit analysis exercise for a project single firm and that for a community project. (6 marks)
b) An investmentproject has been estimated at having the following cash-flows:
Year Costs
000’s Kshs Benefits
000’s Kshs
0 3980 0
1 1600
2 2200
3 2200
4 1600
5 700
It is financed 40% from savings currently earning 2%, but could be deposited in a fixed deposit account at 15%. 60% is financed by a Venture Capitalist who requires at least 25% return on all their investments.
Required
i) What is a Venture Capitalist? (2 marks)
ii) Give possible reasons why the projections are up to year 5. (3 marks)
iii) Is this project viable? Use NPV, PI and PBP criterion in making your assessment.
(9 marks)
Question 3
a) What is the role and importance of each of the following outputs of project implementation planning:
i) Project Brief
ii) Activity or work package
iii) Budget
iv) Responsibility matrix
v) Network diagrams
(15 marks)
b) Which scheduling tools would you recommend in each of the following cases, and why?
i) Organizing a small party. (3 marks)
ii) Managing a malaria drug research programme. (3 marks)
iii) Event management for a Golf tournament at Muthaiga Golf Club with international guests and participants. (4 marks)
TOTAL: 60 MARKS
University of Nairobi
School of Business
Department of Management Science
DOM 402: PROJECT MANAGEMENT
NAIROBI BCOM MOD II DAY
25TH JUNE, 2012
Continuous Assessment Test Time: 11:00 AM – 12:30 PM
Attempt all questions. Give concise relevant answers with illustrations and examples where appropriate.
Question 1
a) Explain the need for tradeoffs in project constraints during project implementation, and why project management is considered an ‘art’. (5 marks)
- Trade-offs needed between cost, time and scope/quality/performance because not all constraints may be met. There is need to choose the most important and vary the others to an acceptable trade-off (3)
- Project mgt requires structured management and soft human relations and social skills. Combining these effectively is an art rather than a science. (2)
b) According to one newspaper article, a weakness in project management is one of the greatest problems the Kenyan public service is facing in achieving acceptable levels of public service delivery. Discuss why this could be so with appropriate examples of the role of projects in national development and public services delivery. (10 marks)
Key pts:
- Projects are the primary means by which govt brings development. E.g. roads, hospitals, schools all start as projects. Many are also organized as programmes under which several projects are done. A strategy like vision 2030 is being implemented through several flagship projects.
- Quality of public services thus depends on how well these are done
- Poor projmgt skills means that they may be delayed, cost too much, be of poor quality, which in the end leads to poorer public services.
- If they are good, then public will get services in time, at right cost and quality.
Question 2
a) Compare and contrast a cost-benefit analysis exercise for a project single firm and that for a community project. (6 marks)
Single firm:
- Done from a market oriented profit perspective. It involves straightforward financial estimation and analysis using market prices. Costs and benefits are fir the firm only.
Community project:
- Done from a society/community perspective. Involves use of social cost benefit analysis using shadow prices. Costs and benefits are for the whole community.
- Aim is to achieve efficiency and equity to lead to a fairer more equal society.
b) An investmentproject has been estimated at having the following cash-flows:
Year Costs
000’s Kshs Benefits
000’s Kshs
0 3980 0
1 1600
2 2200
3 2200
4 1600
5 700
It is financed 40% from savings currently earning 2%, but could be deposited in a fixed deposit account at 15%. 60% is financed by a Venture Capitalist who requires at least 25% return on all their investments.
Required
i) What is a Venture Capitalist? (2 marks)
- Companies that invest in new ideas and young start-up companies to realize capital gains when the ideas mature into products, usually through IPO.
ii) Give possible reasons why the projections are up to year 5. (3 marks)
- 3 Possible reasons: - product market life is estimated at 5 years; may be physical life of the plant; may be the investment horizon of the firm.
iii) Is this project viable? Use NPV, PI and PBP criterion in making your assessment.
(9 marks)
0.4 0.6 Yr Costs Ben Net PBP
0.15 0.25 0 3980 0 -3980 -3980
WACC = 0.21 1 1600 1600 -2380
2 2200 2200 -180
3 2200 2200 2020
4 1600 1600 3620
5 700 700 4320
NPV $911.64 2yrs plus…
Using WACC=21%
Marking: Answers may vary slightly from use of tables. I used Excel. Confirm with tables given.
WACC 2 mks; workings 3 mks (even if WACC is wrong); answers 3 mks, 1 each; decision viable – 1 mk.
Work out PI.
Question 3
a) What is the role and importance of each of the following outputs of project implementation planning:
i) Project Brief
- Initiates and sets out scope for the project
- forms contract between owners and project team
- used in scope management
ii) Activity or work package
- Is the smallest subdivision that advances the work
- Obtained through the work-breakdown structure
- Used in all aspects of implementation planning – budgeting, scheduling, quality control
iii) Budget
- For financial planning and cost management
- Acts as a control tool through variance analysis, we can know how much we are off target and take corrective measures
- Can be related to project progress
iv) Responsibility matrix
- Chart showing who is responsible for what
- Made after work breakdown structure and scheduling are done based on the gantt chart
- Ensures accountability during project implementation
v) Network diagrams
- Used in scheduling
- They allow planner to factor in activity dependencies which Gantt char does not
- Are the basis for CPM and PERT analysis to get critical paths and project durations
(15 marks – 3 mks each)
b) Which scheduling tools would you recommend in each of the following cases, and why?
i) Organizing a small party. (3 marks)
- Gantt chart
- Simple and easy to use, can handle few activities as in this case
ii) Managing a malaria drug research programme. (3 marks)
- PERT
- Research programme activity durations are not predictable as they depend on discoveries to be made
- Hence need to factor in uncertainty
iii) Event management for a Golf tournament at Muthaiga Golf Club with international guests and participants. (4 marks)
- CPM and Gantt charts.
- Dates and deadlines must be met.
- Activity durations can be made accurately for scheduling. E.g. international participants must book tickets early on known dates.
TOTAL: 60 MARKS
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