St.

Mary's University

School of Graduate Studies

ICT Based Final Examination

Course Name: Project Management Course

Code: …….
Examination Date: September 15, 2020
Time Allowed: 4:00 Hours, From 4:00 PM to 8:00 PM
Maximum Mark allotted 40%
Name: Zehara Kassahun ID No. : SGS/0451/MBA2012_A, Sec. G

Instructions:
 Attempt all questions;
 Write your answers on the answer sheet provided next to each question;
 Both PDF and word format are attached, but you need to put your answers on the
word format only;
 Substantiate your answers with practical examples, if any;
 Write your name, ID No. and section on the cover page;
 Exam must be submitted or send before 8:00PM;
 No room to entertain late submission;
 For any inconvenience, you can use the Cell phone and email address of your
instructor:

Instructor name e-mail Cell phone

Dr.Aderaw Gashayie gaderaw@gmail.com 0930375204
Dr. Berhanu Endeshaw berhanu22012@gmail.com 0911466643

1
Dr. Muluadam Alemu muluadam.alemu@aau.edu.et 0911131645

GOOD LUCK!!!

PART I. ESSAY TYPE QUESTIONS (10 marks-)

Instructions: Read the following questions and explain any TWO of them with the necessary level of
details
1. What is the impact of social cost benefit analysis on project selection? Explain and
provide examples
Answer
Social profitability analysis is mostly used for evaluating public sector projects
where the principal objective may not be to maximize the financial yield from
capital investment. While the financial yield is important for most industrial
projects, there are other socio-economic considerations such as foreign
exchange savings, development of backward areas, defense requirements, self-
reliance etc. which may carry more weightage with certain projects. Social cost
benefit analysis considers the social profitability of a project and influences the
selection of a project that has importance to the society than mere financial
return. It may also be relevant for private projects since the fund providing
institutions would like to see that the national considerations are taken care of in
private investments proposals. Therefore, entrepreneurs are required to locate
the profitable project opportunities that have both financial and non-financial
benefits.
Example: low income housing projects (condominium) in Ethiopia are built to
address the housing needs of the people, not for profit maximization. This kind
of project is selected because it is important for the social wellbeing and better
standard of living of the residents. Also projects that empower women, create
more jobs and save foreign exchange have socio-economic benefits, and they
are encouraged by the government.

2. Explain briefly the Project Life Cycle and the phases involved with the help of an example.
3. Explain briefly the duties of a project manager and demonstrate how.

2
 4. Explain the significance of work breakdown structure for project measurement.

Answer

Work breakdown structure (WBS) is a technique used in project management

to breaks down work into components and at the same time establishes the
connection between components on the line of family tree. This structure
enables integration of people, hardware and software into total project work
system. A WBS is a hierarchical representation of the products and services to
be delivered on a project. This tool is very important to identify and understand
the tasks in a project, the person responsible for the task and the time needed to
complete the task. Once the scope is clearly understood, the project manager
must determine who will deliver it and how it will be delivered. WBS prevents
confusion and promotes motivation and commitment to finish ones task
approprietly. This is one of the planning tools that must be used in project
management to ensure project success in any size of project.

Part II. WORK OUT QUESTIONS (5 marks)

Instruction: Work out any TWO of the following questions by showing all necessary steps.

1. BOBO Industries has four potential projects all with an initial cost of $2,000,000. The
capital budget for the year will only allow BOBO industries to accept one of the four
projects. Calculate Net Present Value for each project based on the given the discount
rates and the future cash flows of each project. And decide which project should BOBO
Industries accept?

Year one $500,000 $600,000 $1,000,000 $300,000

Year two $500,000 $600,000 $800,000 $500,000
Year three $500,000 $600,000 $600,000 $700,000
Year four $500,000 $600,000 $400,000 $900,000
Year five $500,000 $600,000 $200,000 $1,100,000
Discount Rate 6% 9% 15% 22%

Based on the data given in question 1, answer Questions # 1.

Question #1. Calculate Net Present Value for each project based on the given the discount
rates and the future cash flows of each project. And decide which project should BOBO
Industries accept? (5 marks)

3
Project A
((500,000*5)/(1+0.06)5)-2,000,000
=1,868,145.43-2,000,000
NPV= -131,854.57
Project B
((600,000*5)/(1+0.09)5)-2,000,000
=1,949,794.16-2,000,000
NPV= -50,205.84
Project C
((1,000,000+800,000+600,000+400,000+200,000)/(1+0.15))-2,000,000
(3,000,000/2.01)-2,000,000
=1,491,503.2-2,000,000
NPV= -508,469.79
Project D
((1,100,000+900,000+700,000+500,000+300,000)/(1+0.22)5)-2,000,000
(3,500,000/2.7)-2,000,000
=1,294,997.38-2,000,000
NPV= -705,002.61

The decision rule here is to accept a project if the NPV is positive and reject it if it is
negative. Therefore, since all projects are negative BOBO industries should avoid all
projects, because it will be very risk to take such projects.

4
2. A project work schedule that has five activities had been performed 15 times in the past.
The time required ranged between 1 week and 15 weeks, and the frequencies as well as
the interdependence of the activities are presented in the table below.

Activities, time taken, frequency and interdependence.

Time taken in weeks

Activity Pessimistic Most likely Optimistic Interdependence

1 13 10 3 1 must be finished before 3 starts
2 12 5 3 2 must be finished before 3 starts
3 15 10 5 3 must be finished before 4 starts
4 11 6 3 4 must be finished before 5 starts
5 10 5 1 5 must be finished to reach to 6
6 It is End of project work schedule

Based on the data given in question 2, answer Questions # 2a and #2b.

Question# 2a. Estimate the time duration for the 5 activities based on probabilistic approach
(5 marks)

Question# 2b. Identify the activities on the critical path and estimate the minimum total
weeks needed to complete the 5 activities on the work schedule to reach to the final node
(i.e 6). (5 Marks)

5
3. Assume you have planned to use Birr 112, 800.00 to finalize Sheger project work
package which is scheduled to be finalized today. Your analysis revealed that the actual
expenditure to date is Birr 115,550 and 80% of the work is completed. Based on this
information answer questions 3a-3e (2*5= 10 Marks).

Question 3a. Calculate the Question 3b. Calculate the Question 3c. Calculate
Cost Performance Index (CPI) Schedule Performance theEstimate to complete

CP index=BCWP/ACWP Index (SPI) (ETC)

=112,800/115,550 SP index=BCWP/BCWC
CP index=0.97 or 96.92% =112,800/144,437.5
=0.78 or 78.09%

Question 3d. Calculate the Question 3e. Calculate the additional budget needed to
complete the remaining task assuming your current
Estimate at Completion
(EAC) performance remain unchanged
Answer
ECP index=BCTW/ If the project costs 115,550 for 80% of work and the
(ACWP-ACC) performance remains the same the remaining 20% of work
will cost 28,887.5 birr and the total cost of the project will
112,800/(112,800-28,887.5)
be 144,437.5 birr
=1.34

6
PART III: CASE TYPE QUESTIONS: (10marks)
Instructions: below are FOUR cases: Select any one of the THREE cases which you
believe will do better and explain the accompanied questions.
Case 1
Assume you are assigned as a project manager in the Ethiopian Road Authority to manage
the construction of first grade asphalt road in Somali regional state. You noticed during
project execution that conflicts arise in the team on both technical and interpersonal levels.
Based on the description in case 1, answer questions # 1a
given

Question# 1a. Discuss the appropriate ways of handling technical and interpersonal
conflict conflicts. (5 Marks)
If I were the project manager I would standardize the work and create better
communication between team members to manage technical conflicts. A common set of
tools, procedures, and jargon can help a project progress efficiently and effectively
toward its goal. Standardization, offers several benefits from a project management and
technical perspective. First, it enables the efficient and effective execution of project
activities through consistency. Second, it enables better integration of activities because
team members can see the interrelationships of their work with that of others. Finally, it
improves communications because team members and reduces conflict and confusion.
Good communication is providing the right information at the right time in the right
amount to the right person. When that occurs, people operate on the “same
wavelength.” They take part in better dialog, reducing the number and magnitude of
misunderstandings. Communication helps to clarify confusion and avoid unnecessary
conflict between team members. As a result of good communication, team members are
also better able to work together for a common goal.
To manage the interpersonal conflict between the team members I would use mediation.
I would try to resolve the conflict by letting them express their frustration and
disappointment, and let them understand each other’s perspective. Better
Communication between team members is vital for avoiding both technical and

7
interpersonal conflict. If everyone have a standard work and they communicate
effectively, both conflicts can be resolved.

8
Case 2
Suppose your construction company has signed multibillion head office building contract
with National Bank of Ethiopia (NBE). After a while NBE, (the client) has required a minor
project scope change and expects you to do this without delays and additional costs. As a
project manager, you believe that you have adequate authorization to make the decision by
yourself, but you are not quite sure.

Question# 2a. Under such circumstances, what should be your next steps? (5marks).

In this situation, since it is a multibillion project the client is very important to the
company and the change is small in scope, so I would try to satisfy the client by doing what
they asked. My next step would be to discuss the changes and their implication on time and
cost with the executive director of the company. After an agreement is reached, I would
gather my team members and inform them about the change and discuss ways in how we
can complete the project without additional cost and on time. Since the project personnel
are the ones doing the job, they have to be included in the discussion so that they feel
motivated to use their full potential to complete the project. Finally, I would manage the
project to its successful completion and to the client’s satisfaction.

Case 3

9
Suppose you are assigned as a project manager that plans to build a complex E-Banking
system for Enat Bank. During the execution of the project, your team has run into a deep
crisis. The project’s goal and objectives have been challenging right from the start, but now
you have discovered that your team members have become increasingly unaware of them.
Being busy solving detail problems, they often fail to understand the overall requirements.
Then they develop solutions which resolve issues in their area of limited responsibility,
while causing new problems at the interfaces with other system components. Meanwhile,
the team members show signs of growing frustration, and time is running away. How can
you help your team in this situation?

Based on the description given in case 3, answer the following question (5 marks).
Question# 3a. Under such project scenario, how can you help your team?

In this situation team members have become so wrapped up in details that they lose
sight of the entire purpose of their project and forget to ask if what they are doing is
contributing toward accomplishing the final goal. I would do three things to resolve the
situation. These are make them focus on the goal, organize the resources in a system
and work on their communication.
 Focus on the goal: The significance of a particular effort is determined by the
degree to which it helps to achieve a final goal. Therefore team members have
to ask themselves if what they are doing is contributing to the project goal or
not. Keeping focus on the goal offers several advantages. First, it enables people
to be proactive rather than reactive. Second, it helps in distinguishing between
what is and is not significant. Third, focusing on the goal provides an objective
standard of evaluation.
 Effective communication: communication between team members helps to
clarify misunderstandings and avoid confusion, frustration and conflict. It helps
team members to understand their task better and clarify their responsibility. It
lets them know what they are contributing for the project and what they have to
do as part of a system for the successful completion of the project.
 Organize resources in a system: The system should be such as to force an
individual to behave in accordance with the requirements and norms of working.
A team should consistently relate, support and supplement each other for the

10
 common cause. When there are thousands of variables both human and non-
human in a project, the only way to combat uncertainties generated is to
plan/develop a sound system that would not only reduce varieties but also
largely regulate themselves, thus reducing manager task.

Case 4

Assume you are assigned by the incumbent Ethiopian PM to manage Sheger Project.
During project execution you found out that work is often not performed at the right time
and in the right order. Deliverables are made by one team member that cannot be processed
by another one. This already leads to timely rework and bad morale among project team

11
members. Then identify and discuss the project management tool that is most appropriate to
deal with problems like this?

Based on the description given in case 7, answer the following question (5 marks).
Question# 4a. Identify and discuss the project management tool that is most appropriate to
deal with problems like this.

12