PROJECT MANAGEMENT

Question 1

Why do we need to conduct financial analysis for a public sector project?
a. Financial Sustainability
b. Profitability
c. Distributional Impacts
d. All of the above

Answer 1

d. All of the above

Question 2

Financial analysis makes use of _____________ prices to take into account effects of real price growth and inflation.

a. Constant
b. Nominal
c. Economic
d. None of the above

Answer 2

b. Nominal

Question 3

Financial streams consider the following, EXCEPT:

a. Revenues
b. Accounts Receivables
c. Capital gains of land
d. Accounts Payables

Answer 3

c. Capital gains of land

Question 4

In the resource flow profile of a project, the following costs are considered in the investment stage EXCEPT:
a. Expenditure on New Acquisitions
b. Interest During Construction
c. Residual Values
d. None of the above

Answer 4

c. Residual Values

Question 5

Financial cash flow statement shows the:

a. Profile of the project’s receipts and expenditures
b. Difference between total inflows and total outflows
c. Net cash flow of the project
d. All of the above

Answer 5

d. All of the above

Question 6

“Accept the project if it generates a ___________ net present value when discounted by the opportunity cost of funds.”

a. Positive
b. Marginal
c. Negative
d. Breakeven

Answer 6

a. Positive

Question 7

The following are included in the resource flow profile of a project EXCEPT:

a. Investment Stage
b. Operating Stage
c. Cessation Stage
d. None of the above

Answer 7

d. None of the above

Question 8

Opportunity cost of an existing asset is the:

a. Residual values of the assets remaining at the end of the project
b. Costs incurred with or without the project
c. Benefit foregone by not putting the asset to its best use
d. Cost of funds tied to the project

Answer 8

c. Benefit foregone by not putting the asset to its best use

Question 9

What is the opportunity cost of capital?
a. Depreciation
b. Sunk cost
c. Interest
d. Residual value

Answer 9

c. Interest

Question 10

An analysis of the potential risks that the project shall be exposed to by establishing and quantifying variables to which the project appears to be sensitive.

a. Economic Analysis
b. Sensitivity Analysis
c. Financial Analysis
d. Cost-Benefit Analysis

Answer 10

b. Sensitivity Analysis

Question 11

A project creates an economic benefit when there is:

a. Increase in the quality of a good/service
b. Occurrence of positive externality
c. Increase in the level/quantity of output
d. All of the above

Answer 11

d. All of the above

Question 11

This is determined by calculating the blended capital resources and multiplying them with the corresponding opportunity cost of capital for each of the capital resource.

a. Opportunity costs
b. Net Present Value
c. Weighted Average Cost of Capital
d. Internal Rate of Return

Answer 11

c. Weighted Average

Question 12

It is a discount rate at which the present value of benefits equals the present value of costs, i.e., NPV = 0

a. NPV
b. IRR
c. BCR
d. ROI

Answer 12

b. IRR

Question 13

An analysis that provides a solid basis for accepting, rejecting and modifying projects, and expressed in constant prices.

a. Financial Analysis
b. Economic Analysis
c. Sensitivity Analysis
d. Predictive Analysis

Answer 13

b. Economic Analysis

Question 13

This is defined as the number of years before the annual economic cost of operations begins to exceed annual economic benefits.

a. Economic life
b. Return of investment
c. Time Value of Money
d. Payback Period

Answer 13

a. Economic life

Question 14

__________________ reflects the hurdle rate which the economic rate of return of a proposed project must equal or exceed for to become an economically viable investment.

a. Social Discount Return
b. Social Discount Rate
c. Special Discount Rate
d. Shadow Price Rate

Answer 14

b. Social Discount Rate

Question 15

Which of the following is NOT an economic viability indicator?

a. Net Present Value
b. Benefit-Cost Ratio
c. Economic Internal Rate of Return
d. Return of Investment

Answer 15

d. Return of Investment

Question 15

_____________ is the process of translating future values into their present worth.

a. Depreciation
b. Financing
c. Discounting
d. Price distortions

Answer 15

c. Discounting

Question 16

________ compares the cost and benefit streams discounted to the present year.

a. Net Present Value
b. Internal Rate of Return
c. Benefit-Cost Ratio
d. None of the above

Answer 16

a. Net Present Value

Question 17

_____________ reflect the economic value of goods and services.

a. Discounting
b. Conversion Factor
c. Foreign Exchange
d. Shadow Prices

Answer 17

d. Shadow Prices