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Project Management Question Paper

Project Management

Course:Bachelor Of Commerce

Institution: University Of Nairobi question papers

Exam Year:2010

University of Nairobi
School of Business
Department of Management Science

DOM 402: PROJECT MANAGEMENT
March 18, 2010
Continuous Assessment Test Time: 6:00 – 7:20 PM
Answer all questions
1) Discuss the relationship between projects, programmes and strategy in the attainment of organizational objectives for:
a) A large private sector organization. (5 marks)
b) A non-governmental organization involved in community based development projects. (5marks)
c) What differences, if any, would exist in the practice of project management in the cases (a) and (b)? Explain your reasoning. (5 marks)

2) Naitiri Traders Ltd. is a medium sized transport and logistics company that intends to invest in a distribution warehouse in Nakuru to cater for its operations in Western Kenya. Initial estimates indicate that they can raise Kshs. 17 million including a Kshs. 9 million loan from their bank, with the rest funded from retained earnings. The project is estimated to cost Kshs. 16 million. The feasibility study gave the following estimates of costs and benefits:

Year Costs (Millions Kshs) Benefits (Millions Kshs)
0 16 0
1 8 13
2 8 16
3 8 16
4 8 17
5 9 18

Naitiri shareholders expect a 15 percent return on capital while the bank loan was sourced at an interest rate of 17 percent.

Required:

a) Obtain the NPV, PI and Payback period for the project. (8 marks)
b) Advise Naitiri on whether, or how, to proceed with the project with their current financial position. Explain your answer. (6 marks)
c) If you are the Managing Director, to what extent would you trust the estimates above? Explain your answer. (6 marks)

3) Assume you work as an Operations and Logistics Officer in Naitiri (See Question 2) and have been appointed Project Manager for the Warehouse project.
a) Describe the steps you would take and the tools you would use, from obtaining approval until you finish planning for implementation. (7 marks)
b) The following are estimated activity durations for a section of the project:

Activity Duration (months) Predecessors
A 2 -
B 1 -
C 2 B
D 5 B
E 4 A,C
F 3 A,C
G 1 D,E

i) Obtain the critical path and project duration. (5 marks)
ii) How would you use this information while managing the project, and what are its limitations? (3 marks)

TOTAL: 50 MARKS

Project Management Question Paper

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