Part I: If the statement is true, write the word TRUE, if not write FALSE.

1. The idea of a project may come to our mind basically from observing existing opportunities and
problems in a given context. T
2. The major objective of identification studies is to collect sufficient data and/or generate
beneficial information. T
3. Financial feasibility is relevant for projects where goods or services are being charged for and
social service projects F
4. The objective of an investment project is benefit from utilization of resources and satisfying the
market demand in a society T
5. Public projects are those that are primarily conceived for generating maximum profit through
customer satisfaction. F

Part II: Multiple choice questions

Read the following each question carefully and select the best answer from the given
alternative answers
1. Project ideas that emanate from the micro-sources are obtained (and/or generated) based on the
following conditions, but one.
A. Analyze the performance of existing industries.
B. Examine the inputs and outputs of various industries.
C. Review imports and export.
D. Investigate local materials and resources.
E. None of the above

2. It is an approach whereby individuals at the micro level, or grass root level, are not involved in the
process of project idea generation
A. Top – Down Approach D. all of the above
B. Bottom – Up Approach E. None of the above
C. Middle-up Approach

3. One of the following is not the major Project identification steps.

A. Generation of project ideas.
B. Screening of project ideas (giving priorities based on resources)
C. Identification of candidate projects passing the screening criteria.
D. Propose for pre-feasibility/feasibility studies.
E. None of the above

4. During the preliminary screening, to eliminate ideas that prima facie are not promising, it is required
to look into aspects pertaining to the following. But one of the following may not be considered.
 A. Compatibility with the promoter. D. Consistency with government
priorities.
B. Availability of inputs and Adequacy of market. E. None of the above
C. Reasonableness of costs.

5. During preliminary selection, the analyst should not eliminate project proposals that:
A. Are technically unsound and risky.
B. Have inadequate supply of inputs.
C. Assume an overambitious sales and profitability target.
D. Have market for the output.
E. Are very costly in relation to benefits.

6. Project feasibility studies should consider the following conditions. However one of the following is
not necessary.
A. Require involvement of professionals in an interdisciplinary team process.
B. The description of the project components should not be well refined
C. Project planning is an interdisciplinary, interactive, and team based activity.
D. Carefully estimate and/or evaluate sensitive parameters like: sales
E. Make sure that funds will be obtained up on favorable out comes.

7. One of the following is not the factors that influence the capacity of a plant?
A. Economies of scale.
B. Minimum economic size and equipment constraint.
C. Resource and Input constraint.
D. Performance of staff and labour (soft ware technology.
E. None of the above

8. Which of the following is not the factor of institutional feasibility study?

A. Sound internal organizational structure of the project.
B. Technology Package
C. Adequate technical and skilled personnel.
D. Provision of any necessary training facilities.
E. Effective channels of communication and good relationships with contributory agencies.

9. It is a value judgment assumes that a Birr in the hands of a poor person has greater social value than
a Birr in the hands of a rich person.
A. Technical feasibility D. Institutional feasibility
B. Financial feasibility E. Economic feasibility
C. Social feasibility
10. Projects those that are primarily conceived for generating maximum profit through customer
satisfaction is
A. Commercial projects D. government projects
B. Public projects E. All of the above
C. Private projects
11. It provides relevant information for the final investment decision whether project is accepted or
rejected .
A. Feasibility study D. government decision
B. Management decision E. None of the above
C. Shareholders contribution
12. Market analysis is an important key in determining the magnitude of
A. investment D. production program
B. location E. all of the above
C. technology requirement

13. It involves the study of the interactions (relationships) between the two parties (consumer and
producer) and the interaction is what we call it market system.
A. Marketing D. Demand and supply
B. Market E. None of the above
C. Market system
D.
14. Which of the following is not a marketing instrument for which a market analyst should take account
of usually called the market-mixes
A. Price D. program
B. Place E. Promotion
C. Product

15. Customer Analysis and Market Segmentation involve the following activities but one.
A. Analysis of what, why, how, when, how much, and where customer purchase a product.
B. Market structure of the product (Consumer goods or capital goods market)
C. Market segmentation (i.e. Uniform customer behavior such as children and adult market;
organizational and Individual market, etc)
D. Market Analysis (market volume, market potential, market share, sales, production program
inputs, etc)
E None of the above

16. Market and demand analysis is a key activity for determining the following factors but one
A. The scope of an investment, C. The possible production programme,
B. The technology required, and D. The choice of location
E. None of the above
Part III: Matching questions
1. Competent management and supervisory personnel. Institutional feasibility
2. Environmental Considerations Technical feasibility
3. It is clearly not relevant for social service projects. Financial feasibility
4. Resources are valued in terms of their opportunity costs. Economic feasibility
5. Determine whether there is a gap between demand and supply. Market analysis

Part IV. Short answer questions (Select two of three questions)

1. What are the Project Idea Generation Processes.? List down at least five points.
2. Draw the diagram of Life Cycle of the Product and show each stage.
3. List down at least five that Technology and engineering study covers