Birla Institute of Technology & Science, Pilani

Work-Integrated Learning Programmes Division

Second Semester 2015-2016
Mid-Semester Test
(EC-2 Regular)
Course No.
Course Title
Nature of Exam
Weightage
Duration
Date of Exam
Note:
1.
2.
3.

: MM ZG523
: PROJECT MANAGEMENT
: Closed Book
: 35%
: 2 Hours
: 28/02/2016 (AN)

No. of Pages
=2
No. of Questions = 6

Please follow all the Instructions to Candidates given on the cover page of the answer book.
All parts of a question should be answered consecutively. Each answer should start from a fresh page.
Assumptions made if any, should be stated clearly at the beginning of your answer.

Q.1 (a) Project Management is result oriented management style and designed to transfer
power from the line manager to the project manager, Do you agree with this
statement? Justify?
Q.1 (b) What is the role of project manager in a non-project driven organization in
implementing the strategies of the organization?
[3 + 3 = 6]
Q.2 (a) Explain the need of project portfolio management system? How does organization
politics influence the project selection?
Q.2 (b) Under what circumstances, would you prefer:
i.
ii.
iii.

Phase estimating over Top-down estimating

Weak Matrix over Strong Matrix
Responsibility Matrix over full-flown WBS
+ 3 = 6]

[3

Q.3 (a) What are the elements of a typical Scope statement?

Q.3 (b) What is Scope Creep and why it occurs?
Q.3 (c) What does it mean if the priorities of a project include Time-Enhance; Scope
Constrain; Cost Accept? Give an example.
[2 + 2 + 2 = 6]
Q.4 (a) Describe the considerations that have a bearing on the choice of technology?
Q.4 (b) Why do the organizations need technical collaboration arrangements and list the key
issues to be covered under this arrangement.
[3 + 2 = 5]

MM ZG523 (EC-2 Regular)

Second Semester 2015-2016

Page 1 of 2

MM ZG523 (EC-2 Regular)

Second Semester 2015-2016

Page 2

Q.5. Medica International is considering a project whose cash flow is as given below:
Year
0
1
2
3
4
5
(a)
(b)

Cash Flow
(1800)
300
600
800
1000
1200

Calculate IRR. Do you accept the project if the cost of capital is 12%
Find the discounted payback period, if the cost of capital is 10%.

[2 + 2 = 4]

Q.6. The balance sheet of Solar India Limited at the end of year n (the year which is just over)
is as follows:
Liabilities
Assets
Share Capital
:
30
Fixed Assets
:
35
Reserves & Surplus :
5
Investments
:
5
Secured Loans
:
4
Current Assets :
10
Unsecured Loans :
3
Cash
: 2
Current Liabilities :
5
Receivables : 5
Provisions
:
3
Inventories : 3
_____
____
50
50
The project income statement and the distribution of earnings is given below:
Sales
: 20.0
Cost of Goods sold
: 8.0
Depreciation
: 3.0
Profit before interest and tax
: 9.0
Interest
: 2.0
Profit before tax
: 7.0
Tax
: 2.0
Profit after tax
: 5.0
Dividend
: 3.0
Retained Earnings
: 2.0
During the year n+1, the firm plans to raise a secured loan Rs. 3 million, repay a
previous term loan to the extent of 1.0 million. Current Liabilities and provisions
would increase by 5%. Further the firm plans to acquire fixed assets worth Rs.3
million and raise its inventories by 1.0 million. The investments are expected to
remain unchanged. Receivables are expected to increase by 5%. The firm plans to pay
3.0 by way of equity dividend. The level of cash would be the balancing amount in
the projected balance sheet. Given the above information, prepare the following:
i.
ii.

Projected Cash Flow statement

Projected Balance Sheet

MM ZG523 (EC-2 Regular)

Second Semester 2015-2016

[4 + 4 = 8]
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