Wolkite University

College of Business and Economics

Department of Economics
Development Planning and Project Analysis II: Group and Individual Assignment
[Maximum weight 20%]
Prepared by: Hulunayen Y. Date: 26 March 2024 Submission Date: 25 April 2024
Group Assignment
Dear Students,

This assignment is an opportunity for you to collaborate, learn from each other, and showcase your
individual skills. However, it is crucial that this assignment is completed with honesty, integrity, and
adherence to the rules set forth by your educational institution. To ensure fairness and authenticity,
please adhere to the following guidelines:

✓ Each member of the group must contribute actively and meaningfully to the assignment.
✓ The assignment must be completed entirely by hand [originality of your work has a value.
✓ While collaboration is encouraged, each group member must independently develop their ideas
and solutions.
✓ Avoid copying or directly reproducing someone else's work, including online resources,
textbooks, or other external sources.
✓ Maintain open and effective communication within your group. Discuss ideas, exchange feedback,
and resolve conflicts constructively. Encourage a supportive and collaborative environment that
fosters learning and creativity.
✓ Submit your handwritten assignment by the specified deadline. Late submissions may incur
penalties, so ensure ample time for proofreading and finalizing your work.

N.B: Remember, the purpose of this assignment is not solely to earn a grade but also to enhance your
knowledge and skills. By adhering to these guidelines and completing the assignment with honesty
and integrity, you contribute to the overall academic environment and personal growth.

Best of luck with your assignment!

1) Select a real-world project and perform a comprehensive cost-benefit analysis. Identify and
categorize the costs and benefits associated with the project, considering both tangible and
intangible factors. Quantify the costs and benefits in monetary terms and analyze their implications.
Assess the financial feasibility of the project based on the net present value (NPV), internal rate of
return (IRR), and payback period. Provide a detailed report outlining your findings and
recommendations. [Hint: Cost-Benefit Analysis]
2) Conduct a cash flow analysis for a manufacturing project. Determine the cash inflows and outflows
over the project's economic life, including initial investment costs, operating costs, and expected
revenues. Calculate key financial metrics such as net cash flow, net present value (NPV), internal rate
of return (IRR), and payback period. Assess the project's financial viability based on the cash flow
analysis and provide recommendations for optimizing cash flow management. [Hint: Cash Flow
Analysis]
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3) Choose a large-scale development project, such as a stadium or a tourism resort, and conduct an
economic impact assessment. Analyze the direct and indirect economic benefits generated by the
project, including job creation, income generation, and local business development. Determine the
project's contribution to the regional economy and its potential multiplier effects. Evaluate the
financial implications of the project's economic impact and assess its long-term sustainability and
socio-economic benefits. [Hint: Economic Impact Assessment].
4) Investigate a specific industry or sector (e.g., renewable energy, healthcare, or agriculture) and
explore the challenges and methodologies involved in determining shadow prices and valuing goods
and services. Discuss the limitations of market prices and the importance of incorporating economic
prices in project analysis. Provide examples of how shadow prices can be calculated and applied in
different contexts. [Shadow Pricing and Valuation].
5) Discuss the importance of transparency and accountability in project management. How does
monitoring and evaluation help in achieving greater transparency and accountability? Provide
examples to support your argument.
6) Discuss the major steps involved in conducting economic analysis for projects. Explain the
identification and quantification of cost and benefit items, the revaluation of these items, and the
determination of economic prices. Provide a comprehensive overview of the economic analysis
process.
7) What is commercial/financial analysis and When is Such Analysis Required? Why one undertakes
Financial Analysis? or when to undertake financial analysis?
8) In project management, why is monitoring and evaluation considered an integral part of the project
lifecycle? How does it contribute to the success and effectiveness of a project?
9) Compare and contrast formative evaluations and summative evaluations in the context of
development projects. Explain how formative evaluations focus on the project's development and
process, while summative evaluations assess the project's outcomes, impact, and lessons learned.
10) Discuss the role of stakeholders in monitoring and evaluation processes. How can involving
stakeholders enhance the effectiveness and credibility of monitoring and evaluation efforts? Explain
the benefits of stakeholder engagement and their contribution to project success.

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 Individual Assignment

Dear Students,

These questions require in-depth knowledge of project planning, financial and economic analysis, and
project financing. They provide opportunities for you to apply theoretical knowledge to real-world
scenarios and develop critical thinking and decision-making skills. They can serve as the basis for
comprehensive individual assignments that delve into various aspects of project planning and financial
and economic analysis of a project.
Best of luck with your assignment!

1) Given the fact that already spent investment is Birr 150,000 and the additional investment cost
required to complete the project is Birr 210,000 and the total benefit of the project after its
completion is Birr 200,000, what should be the decision? Should we proceed with the investment or
stop the investment? Why?
2) Compare and contrast capital (equity) financing and loan financing (debt financing) as means of
project financing. Analyze the advantages and disadvantages of each approach and discuss situations
where one might be more suitable than the other.
3) Define cash flow in financial analysis and explain its significance in evaluating a project's financial
performance. Differentiate between cash inflows and cash outflows and provide examples of each in
the context of a project.
4) Evaluate the advantages and disadvantages of government incentives for project development.
Consider the potential trade-offs and the long-term implications for both the executing entity and
the overall economy.
5) Explain the rationale for conducting economic analysis in project planning. How does economic
analysis differ from financial analysis in terms of their objectives and scope?
6) Discuss the process and elements involved in conducting economic analysis for a project. Compare
and contrast economic analysis with financial analysis, highlighting their similarities and differences.
7) How does effective monitoring and evaluation contribute to the overall success of a project? Discuss
the importance of continuous observation, information gathering, supervision, and assessment in
project management.
8) Discuss the challenges and considerations involved in valuing indirectly traded goods in economic
analysis. Provide an example of an indirectly traded good and explain how its economic value can be
determined using the border price of a related traded good.
9) In the context of economic analysis, explain the concept of externalities. Discuss the importance of
considering both positive and negative externalities and their corresponding monetary values.
Provide examples of externalities in project evaluation.
10) What are the challenges and potential pitfalls of project control? Discuss factors such as poor
information systems, human factors, and the characteristics of large and complex projects that can
make project control ineffective. How can these challenges be mitigated?

Note: these questions offer abundant opportunities for you and your group to explore the
financial and economic analysis of different projects and scenarios, as well as project monitoring
and evaluation.

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