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1. Examination Paper of Project Management
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IIBM Institute of Business Management
IIBM Institute of Business Management
Examination Paper MM.100
Project Management
Section A: Objective Type & Short Questions (30 marks)
 This section consists of Multiples choice and Short Note Type questions.
 Answer all the questions.
 Part one carries 1 mark each and Part Two carries 4 marks each.
Part One:
Multiple choices:
1. Liquidation value of the firm’s assets could be considered as________________
a. The minimum wealth of shareholder
b. The maximum wealth of shareholder
c. The average wealth of shareholder
d. None
2. If ‘P’ be the initial investment, ‘I’ be the interest rate and ‘T’ be the time period for which
funds are invested then interest earned will be______________
a. P*I/T
b. P*T/I
c. (P*I*T)2
d. P*I*T
3. Following the above given conditions, compound Interest be given by___________
a. P*(1+I)1/T
b. P*(1+I)T
c. (P*I*T)T
d. Can not be calculated
4. Firms resorting to ‘Proactive Growth’?
a. Do constant strategic planning
b. Watch things happening
c. Never plan but work on fortune
d. None
5. ‘SPACE’ stands for___________________
6. Increasing marketing expenditure leading to an increased market share is known
as________________
a. Market development
b. Market penetration
c. Market expansion
d. Market growth

2. Examination Paper of Project Management
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IIBM Institute of Business Management
7. If profit after tax is ‘A’ ,depreciation be ‘B’ and interest be ‘I’ then Interest cover ratio
is given by______________
8. E-V rule is also called_____________
a. Mean co variance rule
b. Mean variance rule
c. Mean deviation rule
d. None
9. In case of internally generated funds the opportunity cost to the firm is____________
a. Zero
b. The lending rate
c. The borrowing rate
d. None
10. ‘PERT’ stands for__________________
Part Two:
1. Write a note on ‘Sinking Fund Payment’.
2. Differentiate between PERT and CPM Model?
3. What is ‘Capital Asset Pricing Model (CAPM)’?
4. What do you understand by PBP (Payback Period Method)?
5. Briefly explain the planning for procurement?
END OF SECTION A
Section B: Caselets (40 marks)
 This section consists of Caselets.
 Answer all the questions.
 Each caselet carries 20 marks.
 Detailed information should form the part of your answer (Word limit 150 to 200 words).
Caselet 1
Project partnering at British Airports Authority (BAA)
The construction sector in recent times has not been noted for its high levels of performance. Firms
like BAA, who own and operate airports including Heathrow and Gatwick – London’s two major
airports – rely heavily on their suppliers, including their construction suppliers, for their own
performance. Where construction projects are delayed, the financial consequences can be disastrous.
Furthermore, the disciplines of working on airport premises, including the security issues, play a

3. Examination Paper of Project Management
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IIBM Institute of Business Management
significant part in the daily working lives of project staff. New firms bringing new staff onto the
airport sites invariably require time to bring them up to speed with the appropriate ways of working.
Particular problems include:
 Security – all personnel with access to airside parts of the airport (i.e. past passport control) must
be security vetted and trained. The vetting process takes six weeks, so firms must prepare project
staff in advance;
 Deliveries – getting materials into the airport is problematic, due to significant congestion and
lack of availability of areas for storage;
 Constant use of terminal buildings by passengers – the closing of areas causes problems with
passenger capacity. The firms are required to work with the constraints of passengers using the
areas around where the work is being carried out and physical and noise intrusion must be kept to
a minimum;
 The commercial activities (shops and restaurants) are the economic lifeblood of the business, with
large ground-rents. The objective of projects involving these areas is not simply to complete
works on time but as early as possible, so that the areas can start to generate rental incomes.
The traditional approach to managing fit-out projects (changing internal layouts to accommodate
different facilities and in particular new retail facilities) was that every contract was different, and
would be negotiated with different contractors. These would then employ their own sub-contractors to
carry out parts of the work. The approach that has worked far better for all concerned has been
through the appointment of lead contractors, with long-term contracts – in most cases 10 years – to be
the prime supplier of fit-out services to B.A.A. This particular contract was awarded to MACE. As
part of the agreement, BAA has paid for MACE staff to attend training programmes. This has
extended further, with help being offered to their suppliers – of both materials and labour – for
development. Where particular problems are identified, the supplier can be asked to take part in an
improvement programme. Satisfactory completion can result in similar long-term deals (tied to
continual improvement) being offered to those suppliers. In some cases the problems – particularly
with designs for areas – have been the responsibility of BAA. The mechanisms are now in place to
identify these problems and to introduce new practices to avoid them in future.
1) Summarise the arguments for such a policy of partnering with a major supplier such as BAA and
MACE have done here.
2) Carry out further research to identify further examples of partnering in projects. How well do they
appear to be working?
Caselet 2
The Big Dig
Any project that involves tunnelling is risky. Any project that involved tunneling under a city whilst
trying to keep that city fully operational, is very risky. When that city is bottom in the USA, it is in a
risk category all of its own. This does not, how – ever, excuse the financial performance of this
project, the results of which are exceptional and even make the performance of previous ‘stars of
disaster’ such as the Channel Tunnel, look good. During the 1950s, the Commonwealth of
Massachusetts commissioned new roads as part of a national road-building frenzy that took place at
that time. The result was a partly elevated freeway that cut the city off from its old harbour and over
time coped increasingly less well with the volumes of traffic that were trying to use it. For many
years, the project had been the subject of much politicking and had been rejected by a number of
national administrations. In 1993, it was given the go-ahead. At this time the budget was $US2.6

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IIBM Institute of Business Management
billion, an enormous sum of money for an 8-mile tunnel, but given the technical complexity of the
task, this was considered acceptable. Gradually the costs rose, until in 1998, the estimated final cost
was 410.4 billion. By mid-2000 this had risen to $13 billion and by mid-2001 to over $15 billion. It
was still considered a technical success, but both politically and economically, it was a disaster. In
project management terms it is also a disaster – a 500 per cent-plus overrun on budget can only be
described as ‘talented’. How did such a financial disaster occur? The first is a feature of many large
‘political’ projects – that the ‘real cost’ would not be politically acceptable. The original budget was
deliberately deflated to make the project happen. The second is technical risk – that of the tunnelling
process. The ground through which the tunnelling is being carried out is reclaimed land that was
originally under the sea. The tunnelling process being used was also new, presenting a degree of
technical novelty.
1) How might the project be considered a technical success but an economic, political and project
management disaster?
2) Suggest how the 500 per cent-plus overrun might have come about.
END OF SECTION B
Section C: Applied Theory (30 marks)
 This section consists of Long Questions.
 Answer all the questions.
 Each question carries 15 marks.
 Detailed information should form the part of your answer (Word limit 200 to 250 words).
1. Define the term Integration Management? And how would you explain the Project plan in detail?
2. The funds and personnel requirements of the project change significantly with the stage of its life
cycle. What are the stages in the life cycle of project? Describe them.
END OF SECTION C
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