Debre Berhan University, CoBE, Department of management, project management

final exam (50%), Time allotted: 1.30 Hr

Part One: Say true if the statement is correct, and say false if the statement is
incorrect (1 pt each).
1. Project identification is the initial step of the project cycle and the birthplace
of the project.
2. Location refers to a specific piece of land where the project would be set up.
3. UNIDO Approach to Social Cost Benefits Analysis Provides a comprehensive
framework for SCBA in developing countries.
4. The payback period measures the number of years it will take for the
discounted net benefits to repay the investment.
5. Financial analysis is the methodology developed for evaluating investment
projects from the point of view of the society or economy as a whole.
Part Two: Multiple choice questions( 2 points each)
1. Of the following one is not Macro-level source of project idea?
A. National policies strategies and priorities
B. Government decision to correct social and regular inequalities.
C. Development experience of other nations
D. The identification of unsatisfied demand or needs.
2. All of the following can be screening criteria of banks and other financial
institutions to a certain project proposal, except?
A. Conformance to development objectives
B. Likelihood of default in servicing debt
C. Interests of preferred clients
D. Level of education of the borrower
3. The decision for unaccepted project proposal which are not currently timely but
have a potential at future is
A. Reject C. Consider later
B. Rework D. Accept
4. One cannot be the firm objectives
A. Cost reduction
B. Productivity improvement
C. Decrease in capacity utilization
D. Improvement in contribution margin
5. Among the following alternatives, one is the last step of market and demand
analysis.
A. Situational analysis C. Demand forecasting
B. Characterization of the market D. Market planning
6. Select the method of demand forecasting by considering opinion of group of
experts with a mail survey.
A. Field Sales Force C. Jury of Executives
B. Delphi Method D. Users Expectations
7. Which is odd?
A. Regression analysis C. Exponential Smoothing
B. Simple moving average D. Trend projection
8. All of the following are objectives of supply marketing, except?
A. Cost minimization
B. Risk minimization
C. Cultivation of relation with supplier
D. Improving nominal plant capacity
9. One is not a key factor to be considered in evaluating the labor situation.
A. Prevailing labor rates C. Wastage and spoilage
B. Labor productivity D. Degree of unionization.
10. The costs and benefits that are passed on to the producers and consumers
outside the market with which the project is involved is said to be______.
A. External effect C. Direct effect
B. Indirect effect D. primary effect
11. All of the following make UNIDO Approach & Little-Mirrlees approach similar,
except?
A. Calculating accounting (shadow) prices
B. Measuring cost and benefits in terms of domestic prices
C. Considering the factor equity
D. Use DCF analysis
12. The broad indicator of the annual return expected from initial capital
investment is __
A. NPV C. ROI
B. IRR D. Discount factor
13. Sensitivity analysis is an assessment of ____
A. Profits C. Risk
B. Losses D. Return
14. Which of the following does not assign a value to a business opportunity using
time-value measurement tools?
A. Internal rate of return (IRR) method
B. Net present value (NPV)
C. Discounted cash flow model
D. Payback period method
Assume the required rate of return on projects, project A & project B is 12%. Then
answer the questions from question number 15-20.

Year Project A Project B

0 -80,000 -100,000
1 20,000 25,000
2 25,000 20,000
3 25,000 30,000
4 30,000 35,000
`5 20,000 40,000

15. What is NPV for project A?

A. 5,500 Birr C. 6,005 Birr
B. 6,500 Birr D. 4,565 Birr
16. Assume the present value of cash outflow for project B is 104,565. What will be
the value of IRR?
A. 10 % C. 12 %
B. 1 % D. 0 %
17. If the two projects, project A & B are mutually exclusive, which project should
be accepted, taking NPV as financial evaluation technique?

A. Project A C. Project A & B

B. Project B D. Neither project A nor project B
18. What is the profitability index of project A?
A. 1.0456 C. 1.4650
B. 1.0750 D. None
19. What is the payback period of project B?
A. 3 years C. 3.43 years
B. 0.43 years D. 3.043 years
20. If the above two [projects, Project A & B, are independent projects, and one
appraise the project using NPV, which one should be considered?
A. Project A C. Project A & B
B. Project B D. Neither project A nor project B

Part Three: Discussion Question (5 points).

1. How SWOT Analysis enable a person to generate a project idea. Discuss with
appropriate example.
Answer Sheet for project Management Final Exam
Name_____________________________________ ID No ____________ Section ________
True/False
1.______________
2.______________
3.______________
4._______________
5._______________
Multiple Choice Questions
1._____ 11._____
2._____ 12._____
3._____ 13._____
4._____ 14._____
5._____ 15._____
6._____ 16._____
7._____ 17._____
8._____ 18._____
9._____ 19._____
10._____ 20.______
Part Three: Discussion Question