Project Management

Table of Contents
Chapter 1: Introduction ........................................................................................................2
Chapter 3: Project Identification..........................................................................................3
Chapter 4: Project Preparation ............................................................................................5
Chapter 5: Project Implementation, Monitoring and Evaluation ...................................6
Chapter 7: Project Financing ................................................................................................7
Answer Keys: .........................................................................................................................9

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 Theme 3: Innovation, Strategy and Project Management
Course: Project Management (MGMT4991)

Questions:

Chapter 1: Introduction
1. Which of the following is the best definition of a project?
A. A temporary endeavor undertaken to create a unique product, service, or
result.
B. A routine operation performed to maintain regular business activities.
C. A long-term strategy developed to achieve organizational goals.
D. An ongoing process of continuous improvement within an organization.
2. Which of the following is NOT a feature of a project?
A. Clear start and end dates.
B. Unique deliverables.
C. Limited resources.
D. Routine tasks.
3. What is the key difference between projects and programs?
A. Projects are smaller in scope than programs.
B. Projects have a single objective, while programs have multiple objectives.
C. Projects are temporary, while programs are ongoing.
D. Projects are managed by individuals, while programs are managed by
teams.
4. Which of the following is NOT part of project planning in Ethiopia?
A. Identifying project stakeholders.
B. Defining project objectives.
C. Allocating project resources.
D. Implementing project tasks.

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 5. What is the primary purpose of project planning?
A. To create a detailed project schedule.
B. To identify potential risks and develop mitigation strategies.
C. To allocate project resources effectively.
D. To evaluate project outcomes.
6. Which of the following is an example of a project constraint?
A. Scope creep.
B. Resource availability.
C. Stakeholder communication.
D. Project evaluation.
7. Which of the following is NOT an example of a project deliverable?
A. A completed website.
B. A project management plan.
C. Stakeholder feedback.
D. Training materials.
8. Which of the following is an advantage of project management?
A. Increased flexibility.
B. Reduced project complexity.
C. Elimination of project risks.
D. Decreased stakeholder involvement.
9. What is the purpose of a project charter?
A. To define project objectives and deliverables.
B. To allocate project resources.
C. To create a project schedule.
D. To evaluate project outcomes.
10. What is the role of a project manager?
A. To perform all project tasks personally.
B. To coordinate and oversee project activities.
C. To set project objectives and deliverables.
D. To allocate project resources.

Chapter 3: Project Identification

1. What is the meaning of a project idea?
A. A vague concept without any specific goals
B. A well-defined plan with clear objectives
C. A source of inspiration for potential projects
D. A detailed project proposal
2. Which of the following is a macro source of project ideas?
A. Brainstorming sessions within project teams
B. Market research and customer feedback
C. Government policies and initiatives
D. Feedback from project stakeholders

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 3. What are micro sources of project ideas?
A. High-level strategic plans of organizations
B. Input from project sponsors and executives
C. Technological advancements and innovations
D. Global economic trends and forecasts
4. How can brainstorming sessions contribute to project identification?
A. By providing financial resources for project execution
B. By analyzing project risks and developing mitigation strategies
C. By generating a wide range of potential project ideas
D. By establishing project milestones and timelines
5. Which of the following is an example of a macro source of project ideas in the
context of national development?
A. Identifying market gaps and customer needs
B. Analyzing the organization's internal strengths and weaknesses
C. Monitoring industry trends and competitive landscape
D. Assessing the country's infrastructure development plans
6. How do technological advancements contribute to project identification?
A. By reducing the need for project planning and analysis
B. By creating new opportunities and project possibilities
C. By eliminating the need for stakeholder involvement
D. By minimizing project risks and uncertainties
7. What role do project sponsors and executives play in project identification?
A. They oversee project execution and monitor progress.
B. They provide financial resources for project implementation.
C. They generate project ideas and opportunities.
D. They conduct market research and analyze customer needs.
8. What is the purpose of conducting a feasibility study during project
identification?
A. To determine the availability of project resources
B. To evaluate the potential risks and challenges of the project
C. To finalize the project goals and objectives
D. To define the roles and responsibilities of the project team
9. Which of the following is a characteristic of a well-defined project idea?
A. Ambiguous and open-ended goals
B. Lack of stakeholder involvement
C. Measurable and specific objectives
D. Absence of a project budget
10. What is the importance of project identification in the overall project
management process?
A. It ensures effective project execution and delivery.
B. It eliminates the need for project planning and analysis.
C. It minimizes the involvement of project stakeholders.
D. It increases project costs and resource allocation.

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 Chapter 4: Project Preparation
1. What does a markets and demand analysis study in project preparation
primarily focus on?
A. Evaluating the project's technological requirements
B. Assessing the project's financial viability
C. Analyzing the target market and demand for the project's products or
services
D. Examining the project's environmental impact
2. Which aspect does a raw materials and supplies study typically consider?
A. Identifying potential project risks and challenges
B. Evaluating the project's production program and plant capacity
C. Analyzing the availability and cost of necessary resources
D. Assessing the project's organizational and human resource requirements
3. What is the purpose of conducting an Environmental Impact Assessment (EIA)
during project preparation?
A. To determine the project's location and site requirements
B. To evaluate the financial feasibility of the project
C. To analyze the potential impact of the project on the environment
D. To assess the project's technological requirements
4. What does the production program and plant capacity study involve?
A. Evaluating the financial aspects of the project
B. Analyzing the market demand for the project's products or services
C. Assessing the availability and cost of raw materials and supplies
D. Determining the project's production schedule and capacity requirements
5. What does technology selection refer to in project preparation?
A. Evaluating the project's financial viability
B. Assessing the potential impact of the project on the environment
C. Identifying and selecting the appropriate technology for the project
D. Analyzing the market demand for the project's products or services
6. What does an organizational and human resource study in project preparation
primarily focus on?
A. Evaluating the project's financial aspects
B. Analyzing the market demand for the project's products or services
C. Assessing the project's organizational structure and staffing requirements
D. Determining the project's production program and plant capacity
7. Which financial analysis aspect includes evaluating the initial investment cost,
production cost, and marketing cost?
A. Payback Period (PBP)
B. Accounting Rate of Return (ARR)
C. Net Present Value (NPV)
D. Benefit Cost Ratio (BCR)

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 8. Which financial evaluation metric calculates the time it takes for the project
to recover its initial investment?
A. Payback Period (PBP)
B. Accounting Rate of Return (ARR)
C. Net Present Value (NPV)
D. Internal Rate of Return (IRR)
9. Which financial evaluation metric calculates the profitability of the project
based on the average annual profit?
A. Payback Period (PBP)
B. Accounting Rate of Return (ARR)
C. Net Present Value (NPV)
D. Internal Rate of Return (IRR)
10. Which financial evaluation metric calculates the project's overall profitability
by comparing the present value of cash inflows to cash outflows?
A. Net Present Value (NPV)
B. Benefit Cost Ratio (BCR)
C. Break-Even Analysis (BEA)
D. Internal Rate of Return (IRR)

Chapter 5: Project Implementation, Monitoring and

Evaluation
1. Which of the following is a key component of project implementation?
A. Project planning
B. Project monitoring and evaluation
C. Human resource management
D. Financial analysis
2. What is the purpose of project organization in project implementation?
A. To develop the project budget and allocate resources.
B. To establish project goals and objectives
C. To determine the project timeline and milestones
D. To assign roles and responsibilities to project team members
3. Which type of project organization structure involves a clear hierarchy with
project managers and functional managers?
A. Line and staff organization
B. Divisional organization
C. Matrix organization
D. Flat organization
4. What is the main advantage of a matrix organization structure?
A. Enhanced communication and coordination
B. Clear lines of authority and decision-making
C. Streamlined project reporting and documentation.
D. Increased flexibility and adaptability

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 5. What role does project directing play in project implementation?
A. It involves establishing project goals and objectives.
B. It focuses on allocating project resources and managing budgets.
C. It oversees the day-to-day activities and progress of the project.
D. It evaluates the success and outcomes of the project.
6. What is the purpose of project control in project management?
A. To allocate project resources and manage budgets.
B. To ensure project goals and objectives are met.
C. To evaluate the performance and outcomes of the project
D. To establish clear lines of authority and decision-making
7. What does project monitoring and evaluation involve?
A. Setting project goals and objectives
B. Allocating project resources and managing budgets
C. Tracking project progress and performance
D. Assessing the project's human resource requirements
8. Which aspect of project management focuses on the human aspects of project
implementation?
A. Project planning
B. Project organization
C. Project directing
D. Human resource management
9. What are the prerequisites for successful project implementations?
A. Limited stakeholder involvement and minimal project control
B. Flexible project plans and undefined project goals
C. Skilled project team members and effective communication
D. High project budgets and extensive resource allocation
10. Why is effective project implementation crucial for project success?
A. It ensures compliance with project regulations and standards.
B. It establishes clear lines of authority and decision-making.
C. It manages project risks and addresses potential challenges.
D. It sets the foundation for project monitoring and evaluation.

Chapter 7: Project Financing

1. What are the main sources of project finance discussed in the chapter?
A. Equity, debt, and grants
B. Venture capital and angel investors
C. Government funding and subsidies
D. Donations and sponsorships
2. Which source of project finance involves ownership shares in the project?
A. Equity
B. Loan financing
C. Leasing
D. Grants

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 3. What is the primary characteristic of loan financing?
A. Repayment through project profits
B. No requirement for repayment
C. No interest charges.
D. Flexible repayment terms
4. What does leasing involve in the context of project financing?
A. Renting assets for temporary use
B. Selling assets at a discounted price
C. Acquiring assets through government grants
D. Issuing shares to raise capital.
5. What does the term "cost of capital" refer to?
A. The total project budgets.
B. The interest rate on project loans
C. The overall financing expenses.
D. The profit generated by the project.
6. What role do public policies and regulations play in project financing?
A. They determine the project's market potential.
B. They provide funding for project initiatives.
C. They establish guidelines for financing activities.
D. They dictate the project's cost structure.
7. What are financing institutions in the context of project finance?
A. Government agencies providing grants.
B. Non-profit organizations funding social projects.
C. Banks and financial institutions offering loans.
D. Individual investors providing venture capital.
8. Which financial metric is commonly used to evaluate the cost of capital for a
project?
A. Return on Investment (ROI)
B. Net Present Value (NPV)
C. Internal Rate of Return (IRR)
D. Weighted Average Cost of Capital (WACC)
9. What is the primary function of equity in project financing?
A. To provide long-term loans to the project
B. To purchase assets for the project
C. To generate profit through project operations
D. To cover the initial investment costs
10. What is the advantage of loan financing for a project?
A. No repayment obligations
B. Lower interest rates compared to other sources.
C. Immediate access to project funds
D. No involvement of external financiers

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 Answer Keys:

Chapter 
Item  Chapter 1 Chapter 3 Chapter 4 Chapter 5 Chapter 7
1. A C C C A
2. D C C D A
3. C C C A A
4. D C D A A
5. B D C C C
6. B B C B C
7. C C A C C
8. A B A D D
9. A C B C C
10. B A A C B