UNITY UNIVERSITY COLLEGE

SCHOOL OF DISTANCE AND CONTINUING EDUCATION

Worksheet for Project Analysis

Name________________________
Id. No_______________________
Department __________________
P.O.Box______________________
Region (Zone)_________________
Centre _______________________
Last date of submission Tikimt 10/98 E.C.

This is a worksheet you are expected to do on your own. It carries 30 points. The
worksheet should be completed and mailed to the School of Distance and
Continuing Education for evaluation. Do not try to complete the worksheet until
you have covered all the readings in the course material.

Any question in the course, that you have not been able to understand, should be
stated on a separate sheet of paper and attached to this worksheet. Your tutor
will clarify them for you either by his/her comments on your worksheet or on
the tutorial programs.

After completing this worksheet, be certain to write your Name, Id.No and Address on
the first page. Only your Name and Id.No on the other pages. Also do not forget to leave
enough margin on the left side of your answer sheet for comments by your tutor.

Be sure that this worksheet has __4__ pages including the cover page.
Part I: Multiple Choice

_______1. Which of the following activity is not performed during project

implementation?
a/ Project engineering and design
b/ Construction
c/ Training of workers
d/ Articulation of the investment strategy
e/ Plant commissioning
_______2. The analysis of external environment provides useful information for the
generation of project ideas. Which of the following external factor is a
useful source of information for generation of project idea?
a/ Economic factors
b/ Political factors
c/ Legal factors
d/ Competition in the industry
e/ All of the above
_______3. A Market segmentation in which the market is divided based on age, sex,
family size etc is:
a/ Psychographic
b/ Socio-economic
c/ Demographic
d/ Geographic
e/ Buyer Behaviour segmentation
_______4. Which of the following can be useful for motivation of employees by project
Manager?
a/ Promising material gains
b/ Adopt a positive attitude
c/ Avoid making promises that cannot be kept
d/ Give each employee the attention she/he requires
e/ All of the above

1
_______5. All of the following are tradable goods except:
a/ A good that increases import as a result of increase in consumption
b/ A good that increases export due to increase in production
c/ A good that decreases export due to increase in consumption
d/ A good that decreases import due to increase in production
e/ A good that decreases export due to increase in production

Part II: Workout Questions

1. The following data shows demand for product R for the last eight months:
Month Actual demand ( in units )
January 300
February 500
March 400
April 350
Ma y 400
June 500
July 300
August 400

Required
a/ Using Least Square method, establish the linear regression equation.
b/ Using Least Square method, forecast demand for
i. September
ii. October
iii. November
iv. December
c/ Using a four – month moving average method, forecast demand for the
Month of September
d/ Assume that demand forecast for the month of August was 450 units and
smoothing constant was 30%, forecast the demand for September using
Exponential smoothing method.

2
 2. Assume that the project requires gross investments of Br. 1,600,000 and net
working capital of Br. 200,000 that is expected to be recovered in year 5 fully,
salvage value is negligible.

The cost of production and non-production expenses are summarized bellow:

a/ Production costs
Year 1 = Br, 900,000 Year 3 = Br, 700,000
Year 2 = Br, 600,000 Year 4 = Br, 800,000
Year 5 = Br, 1,000,000

b/ Operating expenses:
Year
1 2 3 4 5
Administrative 100,000 80,000 110,000 100,000 120,000
Selling 60,000 40,000 70,000 90,000 80,000

c/ The project will be fully financed by equity

d/ Out of administrative and selling expenses depreciation expense represents Br,
15,000 and Br, 5,000 respectively.

Annual plant capacity is 1,500,000 but operated at 80% per year over five years
period. Estimated selling price per unit is Br, 15. There are no beginning and
ending inventories. Income tax rate is 30%. The required rate of return is 10%.

Required
1. Prepare the projected income statement for each year for five years.
2. Determine project net cash flows for each year for five years.
3. Evaluated the project using
a/ Payback period
b/ Accounting Rate of Return
c/ Net present value
d/ Profitability index