Assignmen II (1)
Assignmen II (1)
Technolink College
Costing and and Financial Management of Projects
Chapter two
1.Part
One ofI:the
Thefollowing is NOT
following true about project
multiple-choice costwill
questions management?
be helpful in reviewing the principles of
A. Itthis
is a chapter.
part of project management. B. It covers the scope of cost estimations and budgeting.
C. It also covers project cost control. D. None of the above
E. All of the above
2. One of the following is NOT a main type of cost in cost management.
A. Direct materials B. Direct labor C. Cost Overheads D. Administrative and General E. None
3. Which of the following combinations of costs make up prime cost?
a. Direct materials cost and manufacturing overhead cost.
b. Direct labor cost and manufacturing overhead cost.
c. Marketing cost and administrative costs.
d. Direct materials cost and direct labor cost. e. A and B are correct.
4. The project’s cost management’s task in cost estimating is;
a. to examine the different possibilities to spend costs in various project steps.
b. to record whatever cost incurred.
c. to report whatever cost recorded and no attempt for variance analysis.
d. All of the above e. None of the above.
5. Which one of the following document does not provides necessary information to facilitate
the creation of the cost estimate is;
a. the Work Breakdown Structure(WBS).
b. the amounts of all resources which are required to perform that activity.
c. the different possibilities to spend costs in various project steps.
d. All of the above
e. None of the above
September 5/2023
1. Describe the process of cost management i.e the process required to create a comprehensive
project cost plan.
2. Describe the issue of earned value management (EVM) which required for essential and
proactive financial decision making by the project manager. Try to employ diagrams in
your description.
3. Differentiate Cost Estimating and Pricing in cost management of projects.
4. “Cost management information includes both financial and nonfinancial information critical to
the firm’s success.” Elaborate it in detail.
5. Michael Porter argues a firm cannot be at the same time a cost leader and a differentiator. Do
you think a firm could be a cost leader and then become a differentiator, or vice versa?
1. The following are projects for appraisal and selection by a private investor. The projects are not
mutually exclusive. But the investor needs to utilize scarce financial resources to the maximum
benefit possible.
Year A B C
0 (300) (500) (800)
1 150 150 200
2 150 150 200
3 50 200 300
4 50 200 100
5 50 150 700
a. Using payback period as a criterion for evaluation, which project shall be undertaken?
b. Using Net present value method at 12% rate of return, which project shall be preferred?
Compute and indicate the preference.
c. using the Profitability index method at 12% rate of return, which project shall be
preferred? Compute and indicate the preference.
END