UNIVERSITY EXAMINATIONS: 2020/2021

SCHOOL OF BUSINESS & PUBLIC MANAGEMENT

ORDINARY EXAMINATION FOR THE DEGREE OF BACHELOR OF
PROCUREMENT AND LOGISTCIS, COMMERCE & PUPLIC MANAGEMENT
BAM 2205: PROJECT MANAGEMENT
(FULL TIME)

PAPER THREE
DATE: DECEMBER, 2020 TIME: 6 HOURS

INSTRUCTIONS: Answer ALL Questions

QUESTION ONE: (20 MARKS)

a) Company ABC is contemplating to invest in either a Wind Mill for electric power
generation or a Water Pump.
The Wind Mill will require an initial investment of Ksh 3 million and will yield cash
flows of Ksh 1million in year 1, Ksh 1.5 million in year 2, 1.87 million in year 3 and 0.83
million in year 4.
The Water Pump on the other hand will require a modest investment of Ksh 2.57 million. It
will generate returns amounting to Ksh 0.97 million each year over the 4 year useful life of
the Pump.
The rate of interest applicable is 11.25%.
 Required:
i) Which project should the company invest in and why using Pay Back Period and
NPV criterion? (8 marks)
ii) Discuss the factors that an investor in a high capital project may need to put into
consideration before venturing. (6 marks)

b) With the use of an appropriate diagram describe the matrix organizational structure and
show why its advantageous for an organization that does multiple projects concurrently.
(6 marks)

QUESTION TWO: (20 MARKS)

a) Use the following project data to answer questions below. (Time is given in weeks).

ACTIVITY PREDECESSOR OPTIMISTI MOSTLIKELY PESSIMISTIC

C TIME TIME TIME
1 - 2 4 8
2 - 1 2 3
3 1,2 3 5 8
4 3 2 2 3
5 1,2 3 4 7
6 4,5 4 6 9
7 6 8 12 20
8 7 2 3 5
9 7 2 2 3
10 8 5 8 12
11 8 6 9 14
12 9,10 3 4 7
13 11,12 3 4 6
14 11 2 3 5
15 14 4 6 9
16 13 2 2 3

(i) The project completion time, critical activities and all paths for the project Network.
(8 marks)
(ii) The likelihood of completing the project in 60 weeks. (6 marks)

b) Discuss the responsibilities of a Project Support office. (6 marks)

QUESTION THREE: (10 MARKS)
a) The following project objectives belong to a proposed Agricultural Project in a rural sub-
county in Kenya:
 To expand cultivated areas and raise productivity
 To diversify agricultural crops
 To improve the management of sheep breeding
 To facilitate access to productive resources, especially credit
 To encourage the participation of local inhabitants in the development process,
particularly women.
Required:
(i) Are these objectives appropriate for the said project? (1 marks)
(ii) Suggest any 2 sources of funding for such a project. (2 marks)
(iii) Mention 3 stakeholders and their expected interests in such a project.
(3
marks)
(iv) What are the 2 major risks likely to affect this kind of a project, and how can they be
averted or mitigated?
(4
marks)