01.

(MCQs)
Overview of project management.
1. Discipline of initiating, planning, executing, controlling and closing the work of a team to achieve
specific goals and meet specific success criteria at the specified time.
a. Marketing mgt.
b. Project mgt.
c. Finance mgt.
d. Production mgt.
2. Phases represent the path a project takes from the beginning to its end are generally referred to as
project.
a. Technical cycle
b. Life cycle
c. Production cycle
d. Working capital cycle
3. Project life cycle phase, rank in order
a. Initiation, planning, execution, closure.
b. Execution, closure, initiation, planning
c. Planning, execution, initiation, closure
d. Execution, initiation, planning, closure
4. During this project life cycle phase, the project objective or need is identified; this can be a business
problem or opportunity.
a. Closure
b. Execution
c. Planning
d. Initiation
5. During this project life cycle phase, is where the project solution is further developed in as much detail
as possible and the steps necessary to meet the project’s objectives are planned.
a. Closure
b. Execution
c. Planning
d. Initiation
6. During this project life cycle phase, project plan is put into motion and the work of the project is
performed.
a. Closure
b. Execution
c. Planning
d. Initiation
7. During this project life cycle phase, the emphasis is on releasing the final deliverables to the customer,
handing over project documentation to the business, terminating supplier contracts and this is last step.
a. Closure
 b. Execution
c. Planning
d. Initiation
8. People who are invested in the project and who will be affected by your projct at any point along the
way, and their input can directly impact at the outcome.
a. Shareholders
b. Promoter
c. Stakeholders
d. Employees
9. Project manager is
a. Project leader
b. Project financier
c. Project customer
d. Project promoter
10. A project sponsor is
a. Project leader
b. Project financier
c. Project customer
d. Project promoter
11. Organisational structures are grouped by areas of specification within functions.
a. Functional
b. Projectized
c. Matrix
d. Hierarchical
12. The entire company is organised by project and, the project manager is in control of the project.
a. Functional
b. Projectized
c. Matrix
d. Hierarchical
13. The team member report into two bosses, the functional manager and the project manager.
Communications goes from team members to both bosses.
a. Functional
b. Projectized
c. Matrix
d. Hierarchical
14. Dividing complex project to simpler and manageable task is the process identified as
a. Gantt chart
b. NPV
c. Work breakdown structure
d. Flow chart
15. Feasibility study that challenge any business is to gain a sufficiently detail understanding of the
fundamentals of a market
a. Marketing feasibility
b. Technical feasibility
c. Financial feasibility
d. Economical
16. Feasibility study of a project idea includes designing the various processes, installing equipment,
specifying materials, and prototype testing
a. Marketing feasibility
b. Technical feasibility
c. Financial feasibility
d. Economical

17. Techniques that calculate the overall trend in a data set.

a. CPM
b. PERT
c. Moving average
d. EVA
18. Forecast of the month of April based on three period moving average

months Actual demand forecast

Jan 100
Feb 250
March 310
April ?

a. 100
b. 250
c. 310
d. 220
19. Forecast for the month of may based on four period moving average

months Actual demand Forecast

Jan 200
Feb 250
March 300
April 350
may ?

a. 100
 b. 250
c. 310
d. 220
20. From the following info. Calculate the 2 period moving average, calculate the forecast for year 2007

Year Sales (in000’s)

2000 180
2001 195
2002 200
2003 211
2004 222
2005 240
2006 269
2007 284
2008 300
2009 305

a. 254
b. 276
c. 292
d. 302.5
21. For Q20 calculate the forecast for year 2008
a. 254
b. 276.5
c. 292
d. 302.5
22. For Q20 calculate the forecast for year 2009
a. 254
b. 276.5
c. 292
d. 302.5
23. For Q20 calculate the forecast for year 2005, based o five year moving average
a. 201.6
b. 213.6
c. 228.4
d. 245.2
24. For Q20 calculate the forecast for year 2007, based o five year moving average
a. 201.6
b. 213.6
c. 228.4
 d. 245.2
25. For Q20 calculate the error year 2007, based o five year moving average
a. 38.4
b. 55.4
c. 55.6
d. 54.8
26. For Q20 calculate the error year 2008, based o five year moving average
a. 38.4
b. 55.4
c. 55.6
d. 54.8
27. You are given the info. About demand of an item.

Months Demand
1 100
2 150
3 225
4 240
5 170
6 280
7 300
Calculate 4 monthly weighted moving averages with weights as 4:3:2:1 forecast year 5

a. 200
b. 233.5
c. 262
d. 203.5
28. Calculate 4 monthly weighted moving averages with weights as 4:3:2:1 forecast year 6
a. 200
b. 233.5
c. 262
d. 203.5
29. Calculate 4 monthly weighted moving averages with weights as 4:3:2:1 forecast year 7
a. 200
b. 233.5
c. 262
d. 203.5
30. The demand for a particular item for the 10 months of a year is given below. The manager is
considering how well the exponential smoothing serves as an appropriate measure in forecasting the
demand of this item, assuming α=0.2 initial forecast as 2008 forecast for year 2
a. 207
 b. 209
c. 207.4
d. 205.5
31. Same as 31, forecast for year 3
a. 207
b. 209
c. 207.4
d. 205.5
32. Same as 31 α=0.5 initial forecast as 208 forecast for year 2
a. 207
b. 209
c. 207.4
d. 210.5
33. Same as 31 α=0.5 initial forecast as 208 forecast for year 3
a. 207
b. 209
c. 205.8
d. 210.5
34. Same as 31 α=0.8 initial forecast as 208 forecast for year 2
a. 207
b. 212
c. 205.8
d. 210.5
35. Same as 31 α=0.8 initial forecast as 208 forecast for year 3
a. 207
b. 212
c. 205.8
d. 203.2
36. Following table shows actual demand of refrigerators of over a eriod of past 7 weeks:

year 1 2 3 4 5 6 7
demand 39 44 40 45 38 43 39

Using exponential smoothing method (α=0.2), determine forecast demand for year 2

a. 39
b. 41
c. 40
d. 38
37. Same as Q36 determine forecasted demand for year 3
a. 39
 b. 41
c. 40
d. 38
38. From the following table:

Months Demand Absolute error (error)2 %error

1 280
2 288
3 266
4 295 17.00 289.00 5.76
5 302 19.00 361.00 6.29
6 310 22.33 498.78 7.20
7 303 0.67 0.44 0.22
8 328 23.00 529.00 7.01
9 309 4.67 21.78 1.51
10 315 1.67 2.78 0.53
11 320 2.67 7.11 0.83
12 332 17.33 300.44 5.22

Calculate MAD

a. 11.04
b. 11.50
c. 12.04
d. 13
39. Calculate MSE in Q38
a. 223.4
b. 244.5
c. 233.8
d. 242.5
40. Calculate MAPE in Q38
a. 1.28
b. 2.45
c. 4.24
d. 3.84
41. Magnifies the error by squaring each one before adding them and dividing by the number of forecast
periods
a. MAD
b. MSE
c. MAPE
 d. IRR
42. A common way of tracking the extent of forecast error is to add the absolute period errors for a series
of periods and divide by the number of period.
a. MAD
b. MSE
c. MAPE
d. IRR
43. It shows the ratio, or percentage, of the absolute errors to the actual demand for a given number of
periods
a. MAD
b. MSE
c. MAPE
d. IRR

02. ( MCQs)
EVA
1. Industry standard method of measuring a project’s progress at any given point in time, forecasting its
completion date and final cost, and analyzing variances in the schedule and budget as the project
proceeds.
a. Earned value analysis
b. Moving average
c. NPV
d. PI
2. Cost variance is:
a. BCWP-BCWS
b. BCWP-ACWP
c. BCWS-BCWP
d. ACWP-BCWP
3. Schedule variance is:
a. BCWP-BCWS
b. BCWP-ACWP
c. BCWP/ACWP
d. BCWP/BCWS
4. CPI is:
a. BCWP-BCWS
b. BCWP-ACWP
c. BCWP/ACWP
d. BCWP/BCWS
5. SPI is:
a. BCWP-BCWS
 b. BCWP-ACWP
c. BCWP/ACWP
d. BCWP/BCWS
6. A display of cumulative cost, labour hours or other quantities plotted against time.
a. S-curve
b. Moving average
c. NPV
d. PI
7. A project has begun on 1st April 2016 and was expected to be completed by 31st December 2016. The
project is being reviewed 30th September 2016 when the following info. Has been developed:
BCWS= 6000000
BCWP= 5500000
ACWP= 5800000
BCTW= 10000000
Cost variance is:
a. -0.3mn
b. -0.5mn
c. -0.6mn
d. 0.3mn
8. Same qstn.
Schedule variance is:
a. -0.3mn
b. -0.5mn
c. -0.6mn
d. 0.3mn
9. Same qstn.
CPI is:
a. 0.9483
b. 0.9383
c. 0.9167
d. 0.9267
10. Same qstn.
SPI is:
a. 0.9483
b. 0.9383
c. 0.9167
d. 0.9267
11. Same qstn.
Total cost over run:
a. 0.5623
 b. 0.6234
c. 0.7654
d. 0.6543
12. Same qstn.
Expected project duration:
a. 9mnths
b. 9.52mnths
c. 10.28mnths
d. 10.23mnths
13. A project has a projected of Rs. 250 cores and is scheduled to completed in period of 80 weeks. A
review of the project at the end of 50 weeks gave the following additional details,
BCWP= 170crs
ACWP= 180crs
BCWS= 187crs
Cost variance is:
a. -10cr
b. -7cr
c. 10cr
d. 7cr
14. Same qstn.
Schedule variance is:
a. -10cr
b. -7cr
c. 10cr
d. 7cr
15. Same qstn.
CPI is:
a. 0.86
b. 0.99
c. 0.91
d. 0.94
16. Same qstn.
Cost of completing the project:
a. 264.8cr
b. 275.63cr
c. 234.78cr
d. 234.56cr
17. Same qstn.
Time of completion:
a. 92wks
 b. 88wks
c. 82wks
d. 80wks

18. A project has budgeted of Rs. 500000 and is scheduled to be completed in one year. The following a
shows cumulative values of planned costs, earn value and actual cost at the end of each of the first four
months.

Months Planned cost Earned value Actual cost

1 20000 24000 23500
2 60000 58000 62000
3 110000 95000 105000
4 220000 190000 205000
SPI for 2nd mnth:

a. 1.2
b. 0.97
c. 0.86
d. 0.67
19. SPI for 1 mnth:st

a. 1.2
b. 0.97
c. 0.86
d. 0.67
20. CPI for 3rd mnth:
a. 1.02
b. 0.94
c. 0.90
d. 0.93
21. CPI for 4th mnth:
a. 1.02
b. 0.94
c. 0.90
d. 0.93
22. Estimated time to complete the project based on performance at the end of the fourth month:
a. 2.412yrs
b. 3.42yrs
c. 1.121yrs
d. 1.163yrs
23. A project with total budget cost of 30crs is scheduled to be completed in 80wks. A periodic review was
carried out at end of 60wks and results are as given:
BCWP= 17crs
ACWP= 19crs
BCWS= 21crs
Calculate cost variance:
a. -2cr
b. -4cr
c. 5cr
d. 4cr
24. Schedule variance is:
a. -2cr
b. -4cr
c. 5cr
d. 4cr
25. CPI is:
a. 0.694
b. 0.712
c. 0.894
d. 0.612
26. Calculate cost of completion:
a. 23.55cr
b. 24.15cr
c. 33.55cr
d. 35.5cr
27. A water supply project envisaged the construction of ground reservoir at a total cost of 4550L. the
project is planned to be completed in 43wks. 22wks after the commencement, the project status
reviewed after the completion 22wks. It was noted at the time of review that while as plan work worth’
1900L had been scheduled to be completed, only 1875L worth of work had actually been done and the
actual cost incurred was 1920L.
Calculate cost variance:
a. -45cr
b. -25cr
c. 20cr
d. 40cr
28. Schedule variance is:
a. -45cr
b. -25cr
c. 20cr
d. 40cr
 29. CPI is:
a. 0.842
b. 0.843
c. 0.977
d. 0.987

03. (MCQs)
CASH FLOW PROJECTION
1. Measures of a company’s ability to meet its interest payments.
a. Debt service coverage ratio
b. Interest coverage ratio
c. Dividend coverage ratio
d. Leverage
2. Refers to the amount of cash flow available with the firm to service the interest and principle cost for
one year
a. Debt service coverage ratio
b. Interest coverage ratio
c. Dividend coverage ratio
d. Leverage
3. Interest coverage ratio=
a. Interest expenses/EBIT
b. EBIT/interest
c. NPAT+ Depreciation+ interest/principal+ interest
d. EBIT/Interest expenses
4. Debt service coverage ratio=
a. Interest expenses/EBIT
b. EBITA/Interest
c. NPAT+ Depreciation+ interest/principal+ interest
d. EBIT/Interest expenses
5. Following is the data pertaining to project, in which Rs. 40000is invested

Y1 Y2 Y3 Y4 Y5
PBDIT 10000 13000 18000 20000 20000
Depreciation 2000 2000 2000 2000 2000
Interest 3000 3000 3000 2000 1000
Principal repayment 10000 10000
The applicable tax rate is 30%.

Interest coverage ratio for year 1:

 a. 2.67tms
b. 3.67tms
c. 5.33tms
d. 9tms
6. Interest coverage ratio for year 2:
a. 2.67tms
b. 3.67tms
c. 5.33tms
d. 9tms
7. Interest coverage ratio for year 3:
a. 2.67tms
b. 3.67tms
c. 5.33tms
d. 9tms
8. Interest coverage ratio for year 4:
a. 2.67tms
b. 3.67tms
c. 5.33tms
d. 9tms
9. Interest coverage ratio for year 5:
a. 2.67tms
b. 3.67tms
c. 5.33tms
d. 18tms
10. Debt service coverage ratio for year 1:
a. 2.83tms
b. 3.55tms
c. 4.7tms
d. 1.27tms
11. Debt service coverage ratio for year 2:
a. 2.83tms
b. 3.53tms
c. 4.7tms
d. 1.27tms
12. Debt service coverage ratio for year 3:
a. 2.83tms
b. 3.53tms
c. 4.7tms
d. 1.27tms
13. Debt service coverage ratio for year 4:
 a. 2.83tms
b. 3.53tms
c. 4.7tms
d. 1.27tms
14. Debt service coverage ratio for year 5:
a. 2.83tms
b. 3.53tms
c. 4.7tms
d. 1.53tms
15. ABC Ltd. has the following data for projection for the next five years. It has an existing term loan of
720L repayable over the next five years and has got sanctions for new term loan of 1000L which is also
repayable in five years.

Particulars 1 2 3 4 5
PAT 960 1150 1270 1300 1370
Depreciation 310 300 280 270 240
Interest on term loan 324 406 508 550 598
Repayment of term loan 344 344 344 344 344
Calculate Interest coverage ratio year 1:
a. 3.96tms
b. 3.83tms
c. 3.50tms
d. 3.36tms
16. Calculate Interest coverage ratio year 2:
a. 3.96tms
b. 3.83tms
c. 3.50tms
d. 3.36tms
17. Calculate Interest coverage ratio year 3:
a. 3.96tms
b. 3.83tms
c. 3.50tms
d. 3.36tms
18. Calculate Interest coverage ratio year 4:
a. 3.96tms
b. 3.83tms
c. 3.50tms
d. 3.36tms
19. Calculate Interest coverage ratio year 5:
a. 3.96tms
b. 3.83tms
 c. 3.50tms
d. 3.29tms
20. Debt service ratio year 1:
a. 2.32tms
b. 2.48tms
c. 2.18tms
d. 2.37tms
21. Debt service ratio year 2:
a. 2.32tms
b. 2.48tms
c. 2.18tms
d. 2.37tms
22. Debt service ratio year 3:
a. 2.32tms
b. 2.48tms
c. 2.18tms
d. 2.37tms
23. Debt service ratio year 4:
a. 2.32tms
b. 2.48tmss
c. 2.18tms
d. 2.37tms
24. Amount borrowed= Rs. 24000
Annuity rate (12%, 6yrs)= 4.111
Compound annual interest = 12%
Repayment period 6yrs
Equated annual instalment:
a. 40000
b. 58380
c. 68380
d. 76770

04. (MCQs)
Financial analysis
1. Decision relating to planning for capital assets (e.g. Purchase of a new machinery or setting of a
factory) as to whether or not money should be invested in the long term projects.
a. Capital structure
b. Capital budgeting
c. Cost of capital
 d. Leverage
2. Measures the length of time required to recover the initial outlay in the project:
a. NPV
b. PI
c. PBP
d. IRR
3. Equal to the difference between the present value of the future cash inflow usually discounted at the
rate of cost of capital & any immediate cash outflows.
a. NPV
b. PI
c. IRR
d. PBP
4. PV of cash inflow/ PV of cash outflow:
a. NPV
b. PI
c. IRR
d. PBP
5. Rate of return at which NPV from the above investment & cash flows will become zero:
a. NPV
b. PI
c. IRR
d. PBP
6. Excel trading CO. Ltd. is considering the purchase of new machines for the immediate expansion
programme. There are three types of machines in the market for this purpose. Their details are as
follow:

Particulars Machine A Machine B Machine C

Cost of machine 17500 12500 9000
Estimated savings in scrap pr yr 400 750 250
Estimated savings in direct wages pr yr 2750 6000 2250
Additional cost of indirect materials pr yr - 400 -
Expected savings in indirect materials pr yr 100 - 250
Additional cost of maintenance pr yr 750 550 -
Additional cost of supervision - 800 500
Estimated life of machine(yrs) 10 6 5
Taxation at 40% of profit
PBP for machine A:
a. 2.92yrs
b. 4.35yrs
c. 3.26yrs
 d. 7.96
7. PBP for machine B:
a. 2.92yrs
b. 4.35yrs
c. 3.26yrs
d. 7.96yrs
8. PBP for machine C :
a. 2.92yrs
b. 4.35yrs
c. 3.26yrs
d. 7.96yrs
9. A project requires an initial cash outflow of Rs.1000000. It generates cash inflows follows:

Year end 1 2 3 4 5
Cash inflow (Rs. Lakhs) 6 3 2 5 5
Its cost of capital is 10% determine NPV
PV factor @10% is as follow:

year 1 2 3 4 5
PV factor @10% 0.909 0.826 0.751 0.683 0.621

a. 565000
b. 575000
c. 585000
d. 595000
10. PBP profitability:
a. 11L
b. 10L
c. 9L
d. 12L
11. PBP :
a. 1.5yrs
b. 2yrs
c. 2.5yrs
d. 2.75yrs
12. PI:
a. 1.650
b. 1.570
c. 1.595
d. 1.578
13. Company maharaja pvt. Ltd. is planning an investment in new project. The investment budget of the
company Rs. 3000000

Particulars Project A
Investment 3000000
Useful life 5 yrs
Cost of capital 12%
Cash inflows at the end of the year
Yr 1 700000
Yr2 1000000
Yr 3 900000
Yr 4 800000
Yr 4 400000
NPV method.

Year 1 2 3 4 5 6
Discounted factor 12% 0.893 0.797 0.712 0.636 0.567 0.507

a. -2.015L
b. -2.95L
c. 2.75L
d. 2.50L
14. Calculate PBP:
a. 2.5yrs
b. 3yrs
c. 3.5yrs
d. 2.75yrs
15. Company maharaja pvt. Ltd. is planning an investment in new project. The investment budget of the
company Rs.3000000

Particulars Project A
Investment 3000000
Useful life 6yrs
Cost of capital 12%
Cash inflows at the end of the year
Yr1 800000
Yr2 800000
Yr3 800000
Yr4 800000
Yr5 600000
Yr5 200000
 NPV method.

Year 1 2 3 4 5 6
Discounted factor @12% 0.893 0.797 0.712 0.636 0.567 0.507

a. -1.28L
b. -2.95L
c. -2.75L
d. -2.50L
16. From the Following table:

years Project A rs.

0 (500000)
1 250000
2 250000
3 50000
4 50000
5 50000
NPV. Cost of capital 10%:
a. 36500
b. 42000
c. 27000
d. 30000
17. From the Following table:

year Project A rs.

0 (500000)
1 50000
2 50000
3 250000
4 150000
5 500000
NPV. Cost of capital 10%:
a. 330000
b. 142000
c. 279000
d. 187500
18. From the Following table:

year Project A
0 (500000)
1 50000
 2 250000
3 200000
4 350000
5 50000
NPV. Cost of capital 10%:
a. 150000
b. 172250
c. 110000
d. 1250000
19. Project A
Investment on the project: 1000000
Life of project: 5yrs
Period of implementation: 1yr
Cost of capital: 15%

Year 1 2 3 4 5
Cash inflow 200000 300000 400000 300000 100000
NPV:
a. -110000
b. -220000
c. -115700
d. 115000
e. Project A
20. Investment on the project: 1000000
Life of project: 5yrs
Period of implementation: 1yr
Cost of capital: 13%

Year 1 2 3 4 5
Cash inflow 300000 400000 400000 300000 200000
NPV:
a. 139400
b. 220000
c. 115700
d. 215000
21. An org. is considering 3options for a project with the expected cash flows for each option as follow:

Year Option 1 Option 2 Option3

0 (500000) (500000) (500000)
1 250000 50000 50000
 2 250000 50000 250000
3 50000 250000 200000
4 50000 150000 5350000
5 50000 500000 50000
PBP option 1:
a. 2yrs
b. 4yrs
c. 3yrs
d. 5yrs
22. PBP option 2
a. 2yrs
b. 4yrs
c. 3yrs
d. 5yrs
23. PBP option 3
a. 2yrs
b. 4yrs
c. 3yrs
d. 5yrs
24. Your company is considering two mutually exclusive projects A & B, project A involve an outlay of
100million and will generate an expected cash inflow of 25million pr yr for 6yrs. Project B calls for an
outlay of 50million which will produce an expected cash inflows of 13million pr yr for 6yrs. The
company’s cost of capitals is 12%.
NPV for project A:
a. 2.8mn
b. 3.416mn
c. 2.92mn
d. 1.92mn
25. Five projects M, N, O, P, Q are available to a company for consideration. the investment required for
each project and the cash flow it yields are tabulated below. Project M & Q are mutually exclusive.
Taking capital at 10% which combination of projects should be taken up for a total capital outlay not
exceeding Rs. 6L on the basis of NPV and benefit cost ratio (BCR)?

Project Investment Cash flow pr yr No. of yr PVIF @ 10%

M 100000 36000 10 6.145
N 200000 100000 4 3.170
O 240000 60000 8 5.335
P 300000 80000 16 7.824
Q 400000 60000 25 9.007
NPV for project M:
 a. 117000
b. 80100
c. 325920
d. 140420
e. 121220
26. NPV for project N:
a. 117000
b. 80100
c. 325920
d. 140420
e. 121220
27. NPV for project O:
a. 117000
b. 80100
c. 325920
d. 140420
e. 121220
28. NPV for project P:
a. 117000
b. 80100
c. 325920
d. 140420
e. 121220
29. NPV for project O:
a. 117000
b. 80100
c. 325920
d. 140420
e. 121220
30. PI for project M:
a. 1.59
b. 1.33
c. 2.09
d. 1.35
e. 2.21
31. PI for project N:
a. 1.59
b. 1.33
c. 2.09
d. 1.35
 e. 2.21
32. PI for project O:
a. 1.59
b. 1.33
c. 2.09
d. 1.35
e. 2.21
33. PI for project P:
a. 1.59
b. 1.33
c. 2.09
d. 1.35
e. 2.21
34. PI for project Q:
a. 1.59
b. 1.33
c. 2.09
d. 1.35
e. 2.21
35. ABC Ltd. estimated following cash flows for a project.

Year 1 2 3 4 5
Cash flows before 10000 8000 4000 10000 10000
depreciation & tax
Initial investment = 20000
Life time of the project = 5yrs
Required rate of return= 10%
Tax rate= 5%
The project will be depreciated on straight line method.
NPV:
a. 9213
b. 8200
c. 10213
d. 7400
36. From the following table:

Year A B C
0 (100000) (100000) (100000)
1 50000 10000 10000
2 50000 10000 50000
3 10000 50000 40000
 4 10000 30000 70000
5 10000 100000 10000
IRR for project A:
a. 14.18%
b. 19.7%
c. 22.23%
d. 20.23%
37. IRR for project B:
a. 14.18%
b. 19.7%
c. 22.23%
d. 20.23%
38. IRR for project C:
a. 14.18%
b. 19.7%
c. 22.23%
d. 20.23%
39. Compute the IRR from the following data:

Year 1 2 3 4 5
Cash flows -10000 5000 4000 3000 2000

a. 19.32%
b. 18.32%
c. 21.01%
d. 19.01%
40. from the following data, calculate IRR:

Year Cash outflows Cash inflows

0 500000
1 200000
2 125000
3 125000
4 100000
5 100000
6 75000

a. 19.32%
b. 18.32%
c. 21.01%
 d. 14.61%
41. Calculate NPV if initial investment is 500L & cash inflows for subsequent years are 50L, 75L, 125L,
225L & 300L. Assume rat of discounting is 10% per annum.
a. 43L
b. 39L
c. 41.25L
d. 43L
42. Calculated discounted PBP in months of project with initial investment 240L & inflows 25L, 55L,
155L & 200L. Assume rate of discounting 10% pr yr.
a. 3.95yr
b. 4.42yr
c. 3.34yr
d. 4.87yr
43. Calculate internal rate of return if initial investment in project is 200L & cash inflows for 1 & 2 yrs are
120 & 144L respectively.
a. 18.82%
b. 17.75%
c. 19.96%
d. 18.81%
44. PI > 1
a. Accept the project
b. Reject the project
c. Nether accept nor reject
d. None of the above
45. NPV I positive:
a. Accept the project
b. Reject the project
c. Nether accept nor reject
d. None of the above
46. NPV is negative:
a. Accept the project
b. Reject the project
c. Nether accept nor reject
d. None of the above

05. (MCQs)
Critical path & floats
1. A task scheduled to be completed within a specific/ expected duration of time.
a. Activity
b. Event
 c. Path
d. Network
2. Represent the starting/ending point of the activity
a. Activity
b. Event
c. Path
d. Network
3. Diagrammatic representation of the activities in the project. The activities are connected by the
arrows moving a forward direction.
a. Activity
b. Event
c. Path
d. Network
4. A path refers to the sequence of activities that complete the project in the specific time.
a. Activity
b. Event
c. Path
d. Network
5. It is the longest part in the terms of project completion time which the project is completed
a. Non-critical
b. Critical
c. Float
d. Slack
6. In the construction of the network sometimes it is not possible to complete the logical sequence of
the activities of the activities directly & we need to introduce an imaginary activity so as to
complete the sequence in the logical order, this imaginary activity referred
a. Dummy
b. Float
c. Slack
d. Critical path
7. Refers to the earliest time the activity can begin
a. LST
b. EST
c. LFT
d. EFT
8. Refers to the latest time the activity can begin, and still allow the project to be completed on time
a. LST
b. EST
c. LFT
d. EFT
9. earliest time the activity can end
a. LST
b. EST
c. LFT
d. EFT
10. latest time the activity can must end without delaying the total project completion time
a. LST
b. EST
c. LFT
d. EFT
11. It is an amount of time by which an activity can be delayed beyond earliest possible finishing time
a. Free float
b. Total float
c. Independent float
d. Interfering float
12. It is an amount of time by which the completion of an activity can be delayed beyond earliest
possible finishing time without affecting earliest start time
a. Free float
b. Total float
c. Independent float
d. Interfering float
13. It is an amount of time by which the start of an activity can be delayed without affecting earliest
start of subsequent activity
a. Free float
b. Total float
c. Independent float
d. Interfering float
14. It is the part of total float which reduces float of subsequent activity
a. Free float
b. Total float
c. Independent float
d. Interfering float
15. Helps to determine the minimum duration of project i.e. it helps to find out EST & EFT. Forward
pass calculation is done from left to right
a. Forward pass
b. Backward pass
c. Head slack
d. Tail slack
16. Helps to determine the latest date/ duration by which the project can be performed without
increasing the minimum duration of the project. It helps to find out LST & LF. Calculation is done
from right to left.
a. Forward pass
b. Backward pass
c. Head slack
d. Tail slack
17. EFT:
a. EST- duration (time)
b. EST+ duration(time)
c. EST/ duration(time)
d. EST* duration(time)
18. LST:
a. LFT- duration (time)
b. LFT+ duration(time)
c. LFT/ duration(time)
d. LFT* duration(time)
19. Total float:
a. LST+EST
b. LST-EST
c. LST/EST
d. LST*EST
20. Free float:
a. LST-EST
b. Total float- head slack
c. Free float- tail slack
d. Head slack
21. Independent float:
a. LST-EST
b. Total float- head slack
c. Free float- tail slack
d. Head slack
22. Interfering float:
a. LST-EST
b. Total float- head slack
c. Free float- tail slack
d. Head slack
23. Refers to an activity in which the activity or completion time cannot be delayed without affecting
the total project completion time
a. Non-critical
 b. Critical
c. PERT
d. Crashing
24. A small project consist of following eight activities:

Activity Preceding activity Time (days)

A - 20
B A 25
C A 5
D B 15
E C 30
F D 35
G E 5
H F,G 2
Calculate the days on the CP:

a. 62dz
b. 97dz
c. 88dz
d. 101dz
25. Calculate the CP:
a. A-B-D-F-H
b. A-C-E-G-H
c. B-D-F-H
d. A-B-D-H
26. A small assembly plant assembles PC’s through 9 interlinked activities. The time duration for
which is given below:

Activity 1-2 1-3 1-4 2-5 3-6 3-7 4-6 5-8 6-9 7-8 8-9
Duration (hrs) 2 2 1 4 8 5 3 1 5 4 3
Calculate the days on the CP:

a. 10dz
b. 14dz
c. 15dz
d. 19dz
27. Calculate the CP:
a. 1-2-5-8-9
b. 1-3-7-8-9
c. 1-3-6-9
d. 1-4-6-9
28. Duration 25dz, EST=20, LFT=45
 Calculate EFT:
a. 45
b. 55
c. 65
d. 60
29. Duration 25dz, EST=20, LFT=45
Calculate LST:
a. 20
b. 25
c. 35
d. 30
30. Duration 30dz, EST=25, LFT=90
Calculate LST:
a. 50
b. 55
c. 60
d. 65
31. Duration 30dz, EST=25, LFT=90
Calculate EST:
a. 50
b. 55
c. 60
d. 65
32. EST=11, EFT=14, LST=12, LFT=15
Calculate total float:
a. 2
b. 1
c. 3
d. 4
33. EST=13, EFT=18, LST=15, LFT=20
Calculate total float:
a. 2
b. 1
c. 3
d. 4
34. EST=13, EFT=18, LST=15, LFT=20, HS=0, TS=2
Calculate free float:
a. 2
b. 1
c. 3
 d. 4
35. EST=13, EFT=18, LST=15, LFT=20, HS=0, TS=2
Calculate independent float:
a. 2
b. 1
c. 3
d. 0
36. EST=13, EFT=18, LST=15, LFT=20, HS=0, TS=2
Calculate interfering float:
a. 2
b. 1
c. 3
d. 0
37. EST=4, EFT=8, LST=4, LFT=8, HS=0, TS=0, duration=0
Calculate total float:
a. 1
b. 2
c. -1
d. 0
38. EST=4, EFT=8, LST=4, LFT=8, HS=0, TS=0, duration=0
Calculate free float:
a. 1
b. 2
c. -1
d. 0
39. EST=4, EFT=8, LST=4, LFT=8, HS=0, TS=0, duration=0
Calculate independent float:
a. 1
b. 2
c. -1
d. 0
40. EST=4, EFT=8, LST=4, LFT=8, HS=0, TS=0, duration=0
Calculate interfering float:
a. 1
b. 2
c. -1
d. 0
41. EST=10, EFT=13, LST=18, LFT=21, HS=8, TS=2, duration=3
Calculate total float:
a. 8
 b. 9
c. 0
d. 7
42. EST=10, EFT=13, LST=18, LFT=21, HS=8, TS=2, duration=3
Calculate free float:
a. 6
b. 1
c. 0
d. 2
43. EST=10, EFT=13, LST=18, LFT=21, HS=8, TS=2, duration=3
Calculate free float:
a. -1
b. 1
c. 0
d. -2
44. EST=10, EFT=13, LST=18, LFT=21, HS=8, TS=2, duration=3
Calculate interfering float:
a. 8
b. 7
c. -8
d. 9

06. (MCQs)
PERT

1. Assume that the completion time of an activity in the project is fixed observes a single value
a. Critical path method
b. PERT
c. NPV
d. IRR
2. Assume that the completion time of an activity in the project is based three time estimate
optimistic, pessimistic, most likely
a. Critical path method
b. PERT
c. NPV
d. IRR
3. It is the shortest possible time required for the completion of the activity
a. Pessimistic
 b. Optimistic
c. Most likely
d. Average
4. It is the longest possible time required for the completion of the activity
a. Pessimistic
b. Optimistic
c. Most likely
d. Average
5. It is the estimate within which the activity is completed more often
a. Pessimistic
b. Optimistic
c. Most likely
d. Average
6. Expected time:
a. a+ 4m+b/6
b. a+ 4m+b/4
c. a+ 4m+b/5
d. a+ 4m+b/3
7. variance:
a. (b-a)^2/36
b. (b-a)^2/25
c. (b-a)^2/49
d. (b-a)^2/6
8. Standard deviation:
a. ^
b. (b-a)^2/36
c. (b-a)^2/25
d. (b-a)^2/6
9. PERT stands:
a. Program evaluation & review technique
b. Program evaluation & revision technique
c. Probabilistic evaluation & revision technique
d. Probabilistic evaluation & review technique
10. PERT model under which the result estimated in a manner of probability
a. Probabilistic
b. Binomial
c. Deterministic
d. Liner programming
11. CPM model under which the result estimated in a manner of probability
a. Probabilistic
 b. Binomial
c. Deterministic
d. Liner programming
12. CPM stands:
a. Critical path mixture
b. Non critical path method
c. Important path method
d. Critical path method
13. CPM deals with activated of_____ time
a. Pessimistic
b. Uncertain
c. Precise
d. Optimistic
14. Optimistic= 5, most likely=11, pessimistic= 17
a. te= 12, var= 4
b. te= 11, var= 4
c. te= 11, var= 6
d. te= 12, var= 6
15. Optimistic= 3, most likely= 9, pessimistic= 27
a. te= 11, var= 16
b. te= 11, var= 25
c. te= 12, var= 16
d. te= 11, var= 25
16. Optimistic= 2, most likely= 5, pessimistic= 8
a. te= 5, var= 2
b. te= 5, var= 6
c. te= 6, var= 1
d. te= 5, var= 1
17. Optimistic= 2, most likely= 4, pessimistic= 6
a. te= 6, var= 9/36
b. te= 6, var= 16/36
c. te= 6, var= 4/36
d. te= 4, var= 16/36
18. Optimistic= 2, most likely= 5, pessimistic= 8
a. te= 4, var= 25/36
b. te= 5, var= 16/36
c. te= 6, var= 36/36
d. te= 5, var= 36/36
19. te= 33, S.D= 5, z= 1 (table value= 0.3413), find out the probability of completing the project in 30
days
 a. 0.8413
b. 0.1587
c. 0.6201
20. X= 38, te= 33, S.D= 5 probability of 0.445 z value= 1.6, calculate the project duration if the
project time is 94.5%
a. 41dz
b. 38dz
c. 45dz
d. 71dz
21. te= 21, S.D= 1.94, z= 1.013 (table value= 0.3485), find out the probability of completing the
project in 19 days
a. 0.9091
b. 1
c. 0.8485
d. 0.1515
22. te= 21, S.D= 3.77, z= 1.55 (table value= 0.4394), find out the probability of completing the project
in 24 days
a. 0.9394
b. 0.5
c. 1
d. 0.606
23. te= 21, S.D= 1.94, z= 0.52 (table value= 0.1985), find out the probability of completing the project
in 22 days
a. 0.5
b. 0.8015
c. 0.6985
d. 0.3015
24. te= 21, S.D= 1.94 probability of 0.25 z value= 0.68, calculate the project duration if the project
time is 75%
a. 22dz
b. 23dz
c. 24dz
d. 21dz
25. What duration will have 95% confidence for project completion? (given under normal curve z= 0,
to z= 1.65 is 0.45), te= 23, S.D= 3
a. 26dz
b. 23dz
c. 32dz
d. 28dz
26. What duration will have 90% confidence for project completion? (given under normal curve z= 0,
to z= 1.29 is 0.4015), te= 74, S.D= 8072
a. 85dz
b. 83dz
c. 82dz
d. 77dz
27. probability of completing the project in 30 days, te= 51, S.D= 5.95, z= 3.53 (table value= 0.4998)
a. 0.0002
b. 0.9998
c. 0.5
d. 1
28. probability of completing the project in 17 days, te= 19, S.D= 3, z= 0.67 (table value= 0.2486)
a. 25.14%
b. 74.86%
c. 50%
d. 100%

7. (MCQs)
Crashing

1. In time- cost optimization of a project, crashing is done

a. On all the activities
b. On all the activities lying on the CP
c. Only one activity lying on the original CP & having flatter cost slopes
d. On original critical activities and those that become critical at any stage of
crashing in the order of ascending cost slope
2. Crashing a project in terms of duration would result in 1. An increase in the indirect cost 2. A
decrease in the indirect cost 3. A decrease in the direct cost 4. An increase in the direct cost
a. 1 & 4 are correct
b. 2 & 43are correct
c. 1 & 3 are correct
d. 2 & 4 are correct
3. In the time- cost optimization, using CPM method for network analysis, the crashing of the
activities along the critical path is done starting with the activity having
a. Longest duration
b. Highest cost slope
c. Least cost slope
d. Shortest duration
4. In the time- cost analysis, the cost slope is defined as
a. Crash cost – normal cost/ normal time – normal time
 b. Crash time – normal time/ Crash cost – normal cost
c. Crash cost – normal cost/ normal time- crash time
d. normal cost- Crash cost/ normal time- normal time
5. the optimum duration is the:
a. the summation of the normal- duration of each activity in the project
b. the summation of the normal- duration of each activity on CP
c. one, which gives the minimum total cost for completing the project
d. the summation of crash time of activities on CP
6. Which one of the following is the correct sequence to analyse a project implementation?
a. Time- cost study, network, WBS, scheduling with resource allocation
b. network, Time- cost study, scheduling with resource allocation, WBS
c. WBS, network, scheduling with resource allocation, Time- cost study
d. WBS, Time- cost study, network, scheduling with resource allocation
7. Which one of the following is the objective in crashing?
a. Reduction in duration
b. Reduction in resource
c. Reduction in cost
d. Reduction in project size
8. In a construction project, the cost slope of an activity is an indication of:
a. Extra time needed
b. Extra cost needed
c. Reduction of duration of critical activity
d. Crashing of an activity
9. In resource levelling:
a. Total duration of a project is reduced
b. Total duration of a project is increase
c. Uniform demand of resource is achieved
d. Cost of project is controlled
10. Which activity is to be selected for crashing:
a. The activity with lowest cost irrespective of it being on the CP or no
b. The activity with highest cost irrespective of it being on the CP or no
c. The activity with highest incremental cost on the CP
d. The activity with lowest incremental cost on the CP
11. Incremental cost of crashing can be achieved by:
a. Normal cost/ normal time
b. Crash cost/ crash time
c. Difference in time/ difference in cost
d. Difference in cost/ difference in time
12. A project can be crash further if,
a. All the activities on the critical path are crashed
 b. The direct cost decrease
c. The indirect cost decrease
d. None of these
13. It is advisable to stop crashing further if,
a. Total cost increase
b. The direct cost decrease
c. The indirect cost decrease
d. None of these
14. For project with multiple critical path:
a. Crashing cannot be done
b. Only one activity is crashed to reduce one day of project time
c. Usually multiple activities are crashed at one time to reduce one day
d. None of these
15. The cost directly dependent upon the amount of resource used. This is the cost of manpower,
material & machine time used
a. Fixed cost
b. Variable cost
c. direct cost
16. the cost is the cost towards the general administrative expense, licence fee, taxes etc. this cost
does not depends on the progress of the project
a. Fixed cost
b. Variable cost
c. direct cost
d. indirect cost
17. involve the process of rescheduling the activities in the project so as to complete the project
before the normal duration with minimum extra cost
a. project crashing
b. PERT
c. NPV
d. IRR
18. Normal time= 8dz, crash time= 6dz, normal cost= 100rs, crash cost= 200rs, cost slope per day
a. 50
b. 100
c. 75
d. 60
19. Normal time= 10dz, crash time= 5dz, normal cost= 100rs, crash cost= 400rs, cost slope per day
a. 50
b. 100
c. 75
d. 60
20. When an activity is crashed:
a. Direct cost increases and indirect cost decreases
b. Direct cost decreases and indirect cost increases
c. Both cost decreases
d. Both cost increases
21. A construction schedule is prepared after collecting:
a. Number of operation
b. Output of labour and machinery
c. Quantity of various items
d. All of the above