Q1. Define net present value.

Net Present Value (NPV) is a financial metric used to evaluate the profitability of an investment or
project by comparing the present value of its expected cash inflows to the present value of its expected
cash outflows. It takes into account the time value of money, which recognizes that a rupee received or
paid in the future is worth less than a rupee received or paid today due to factors such as inflation and
opportunity cost.

Q2. Differentiate between PERT and CPM

PERT (Program Evaluation and Review Technique) and CPM (Critical Path Method) are both project
management techniques used to schedule and control projects, but they differ in their approach and
focus. PERT emphasizes probabilistic time estimates and allows for uncertainty in activity durations,
making it suitable for projects with high uncertainty or complexity.

CPM, on the other hand, focuses on deterministic time estimates and identifies the critical path, which is
the longest path through the project network, making it suitable for projects with well-defined activities
and timelines.

Q3. Define “crash cost”.

Crash cost refers to the additional cost incurred when expediting or accelerating the completion of a
project or specific activities within the project schedule. It represents the cost associated with reducing
the duration of a project or activity to meet a tighter deadline or to mitigate project delays. Crash cost
typically includes expenses such as overtime wages, expedited shipping or delivery charges, additional
resources or manpower, and any other costs associated with accelerating project activities.
Organizations may incur crash costs to avoid penalties for project delays, to meet contractual
obligations, or to capitalize on time-sensitive opportunities.

Q4. Differentiate between earnest money deposit and security deposit.

Earnest Money Deposit (EMD):

 EMD is a sum of money paid by a buyer to a seller to demonstrate serious intent or commitment
to purchase a property.
 It is often a small percentage of the total purchase price and is submitted along with the
purchase offer or agreement.
 EMD serves as a form of security for the seller, indicating that the buyer is financially capable
and committed to completing the transaction.
 If the buyer backs out of the deal without a valid reason, they may forfeit the EMD to the seller
as compensation for the time and effort invested.

Security Deposit:
  A security deposit is a refundable sum of money paid by a tenant to a landlord or property
owner as a form of security against potential damages or non-payment of rent.
 It is typically equivalent to one or two months' rent and is collected before the tenant occupies
the rental property.
 The security deposit serves to protect the landlord's interests in case the tenant causes damage
to the property beyond normal wear and tear or fails to fulfill lease obligations.
 At the end of the lease term, the security deposit is returned to the tenant, minus any
deductions for damages or unpaid rent, provided the property is returned in good condition.

Q5. Briefly explain the safety measure taken in construction projects in crowded area in

Excavation.

In construction projects conducted in crowded areas with excavation work, several safety measures are
crucial to ensure the protection of workers, pedestrians, and nearby structures. These measures include:

 Implementing barriers or fencing around the excavation site to prevent unauthorized access and
ensure pedestrian safety.
 Posting warning signs and signals to alert passersby about the construction activities and
potential hazards.
 Using proper shoring, bracing, or trench boxes to support the excavation walls and prevent
collapses.
 Conducting regular inspections of the excavation site and surrounding areas to identify and
address any safety hazards promptly.
 Providing training to workers on excavation safety procedures and emergency response
protocols. These measures help minimize the risk of accidents and injuries and ensure safe
construction operations in crowded areas.

Q6. Define the following terms:

a) Benefit-Cost Ratio (BCR): The benefit-cost ratio is a financial metric used to evaluate the
profitability of an investment proposal by comparing the present value of its expected benefits
to the present value of its expected costs. It is calculated by dividing the total discounted
benefits of the investment by the total discounted costs. A BCR greater than 1 indicates that the
benefits outweigh the costs, making the investment potentially viable.
b) Internal Rate of Return (IRR): The internal rate of return is a financial metric used to assess the
profitability of an investment proposal by calculating the discount rate that equates the present
value of its expected cash inflows to the present value of its expected cash outflows. It
represents the effective annualized rate of return generated by the investment and is used to
compare investment alternatives. A higher IRR indicates a more attractive investment
opportunity.
c) Accounting Rate of Return (ARR): The accounting rate of return, also known as the average rate
of return or return on investment, is a financial metric used to assess the profitability of an
 investment proposal based on accounting profits generated by the investment over its lifespan.
It is calculated by dividing the average annual accounting profit by the average investment
outlay. ARR is expressed as a percentage and provides insight into the profitability of an
investment relative to its initial cost.

Q7. What do you understand by “Risk cost management” for evaluation of projects?

Risk cost management is a strategic approach used to identify, assess, prioritize, and mitigate risks
associated with project activities that have the potential to impact project costs. It involves
systematically analyzing potential risks, determining their likelihood and potential impact on project
objectives, and implementing measures to minimize or eliminate their adverse effects on project costs.

Key aspects of risk cost management include:

 Risk Identification: Identifying and categorizing potential risks that may affect project costs,
including uncertainties related to project scope, resources, schedule, market conditions, and
external factors.
 Risk Assessment: Evaluating the likelihood and impact of identified risks on project costs using
qualitative and quantitative analysis techniques such as risk probability and impact assessment,
sensitivity analysis, and scenario analysis.
 Risk Prioritization: Prioritizing risks based on their significance and potential impact on project
costs, focusing resources and attention on high-priority risks that pose the greatest threat to
project success.
 Risk Mitigation: Developing and implementing risk mitigation strategies and contingency plans
to minimize the likelihood and impact of identified risks on project costs. This may involve risk
avoidance, risk reduction, risk transfer, or risk acceptance strategies.

Q8.Discuss the objectives and functions of construction project management.

Construction project management involves planning, coordinating, and controlling various aspects of
construction projects to achieve project objectives efficiently and effectively. The objectives and
functions of construction project management can be summarized as follows:

Objectives:

 Cost Management: Ensuring that the project is completed within the allocated budget by
accurately estimating costs, monitoring expenses, and implementing cost-control measures to
prevent cost overruns.
 Time Management: Managing project schedules and timelines to ensure timely completion of
project milestones and overall project delivery, minimizing delays and maximizing efficiency.
 Quality Management: Ensuring that the project meets specified quality standards and
requirements by implementing quality assurance and quality control measures throughout the
construction process.
  Scope Management: Defining and controlling the scope of work to ensure that project
deliverables meet stakeholder expectations and requirements while avoiding scope creep and
unnecessary changes.
 Risk Management: Identifying, assessing, and mitigating risks that may impact project
objectives, including risks related to safety, financial, environmental, and regulatory compliance.

Functions:

 Project Planning: Developing project plans, schedules, budgets, and resource allocation
strategies to guide project execution and ensure alignment with project objectives and
stakeholder expectations.
 Project Organization: Establishing project teams, roles, responsibilities, and reporting structures
to facilitate effective communication, coordination, and collaboration among project
stakeholders.
 Project Execution: Overseeing and coordinating construction activities, including procurement,
subcontracting, site management, and quality control, to ensure that work is performed safely,
efficiently, and in accordance with project specifications and requirements.
 Project Monitoring and Control: Monitoring project progress, performance, and expenditures
against established baselines and benchmarks, identifying variances and deviations, and
implementing corrective actions to keep the project on track.
 Quality Assurance and Control: Implementing quality management systems, procedures, and
inspections to ensure that project deliverables meet specified quality standards and
requirements.

Q9.Discuss the term “project scheduling” and its importance in construction projects.

Project scheduling is the process of establishing a timeline or schedule for the execution of various
activities and tasks within a construction project. It involves identifying the sequence of activities,
determining their durations, and allocating resources to ensure that the project is completed on time
and within budget. Project scheduling plays a critical role in construction projects for several reasons:

 Time Management: Project scheduling helps project managers allocate resources and manage
time effectively to ensure that activities are completed in the most efficient sequence,
minimizing delays and optimizing project timelines.
 Resource Allocation: By creating a detailed schedule, project managers can identify resource
requirements for each activity and allocate resources
 Coordination and Sequencing: A well-developed schedule enables project teams to coordinate
and sequence activities in the most logical and efficient manner
 Risk Management: Project scheduling allows project managers to identify and assess schedule
risks, such as critical path activities, resource constraints, and external dependencies.
Q10.Discuss concept of work-breakdown structure in scheduling of construction projects.

The Work Breakdown Structure (WBS) is a hierarchical decomposition of the project scope into smaller,
more manageable components, known as work packages. In the context of construction projects, the
WBS serves as a foundation for project scheduling by breaking down the scope of work into specific
tasks and activities that can be scheduled, assigned, and tracked.

The WBS facilitates project scheduling in several ways:

 Task Identification: By breaking down the project scope into manageable components, the WBS
helps identify all the tasks and activities required to complete the project.
 Task Sequencing: Once the tasks are identified, they can be sequenced in the most logical and
efficient order to create a project schedule. The WBS provides a framework for understanding
the relationships and dependencies between tasks.
 Resource Allocation: With a clear understanding of the tasks involved, project managers can
allocate resources, such as labor, materials, and equipment, to each task based on its
requirements and priority.
 Time Estimation: The WBS provides a basis for estimating the duration of each task or work
package, allowing project managers to develop a realistic project schedule.

Q11.Discuss time-cost trade off measures adopted in various construction projects.

Time-cost trade-off, also known as project crashing or time compression, is a project management
technique used to reduce project duration by increasing project costs. Several measures are adopted in
construction projects to implement time-cost trade-offs:

 Resource Allocation: Additional resources, such as labor, equipment, or materials, may be

allocated to critical project activities to accelerate their completion.
 Overtime: Working overtime or adding additional shifts can help expedite project schedules by
increasing the amount of labor available to work on the project.
 Fast-tracking: Sequential activities that were initially planned to be performed in series are
overlapped to reduce project duration. This involves starting certain activities before their
predecessors are completed.
 Outsourcing: Outsourcing certain tasks or components of the project to specialized contractors
or vendors can expedite project schedules by leveraging their expertise and resources.
 Use of Prefabricated Components: Prefabrication of building components off-site can reduce
construction time on-site, allowing for faster project completion.
 Incentives and Penalties: Contractual incentives or penalties may be used to motivate
contractors to complete tasks ahead of schedule or to penalize delays.

Q12.Define and discuss resources allocation.

Resource allocation is the process of assigning and distributing resources, such as labor, equipment,
materials, and finances, to various activities and tasks within a project in order to achieve project
objectives efficiently and effectively. It involves identifying the resource requirements of each activity,
determining the availability of resources, and allocating resources based on priorities, constraints, and
project needs.

It involves several key steps:

 Resource Identification: Identifying the types and quantities of resources needed to complete
each project activity or task based on project requirements, specifications, and plans.
 Resource Availability: Assessing the availability of resources, including the availability of skilled
labor, availability of equipment and machinery, and availability of materials and supplies.
 Resource Allocation: Assigning resources to specific activities and tasks based on their priority,
criticality, and dependency within the project schedule. This may involve balancing competing
demands for resources and resolving conflicts.
 Resource Leveling: Optimizing resource utilization by smoothing out resource demands over
time to avoid peaks and valleys in resource usage, thereby preventing overallocation or
underutilization of resources.

Q13.Discuss breach of contract.

A breach of contract occurs when one party fails to fulfill its obligations or violates the terms and
conditions specified in a legally binding agreement without a valid excuse or justification. Breaches of
contract can take various forms, including:

 Material Breach: This occurs when a party's failure to perform a contractual obligation is
significant and goes to the heart of the contract, resulting in a substantial loss or detriment to
the other party.
 Minor Breach: Also known as a partial breach, this occurs when a party fails to perform a minor
aspect of the contract that does not significantly impact the overall purpose of the agreement.
 Anticipatory Breach: This occurs when one party indicates, either explicitly or implicitly, that it
will not fulfill its contractual obligations before the performance is due.
 Fundamental Breach: This is a breach of contract that is so significant that it goes to the root of
the contract, rendering it impossible or pointless for the non-breaching party to continue
performance.

Q14.List out the requirements of valid contract.

A valid contract is a legally enforceable agreement between two or more parties that creates mutual
obligations. To be considered valid, a contract must satisfy certain requirements, including:

 Offer and Acceptance: The contract must involve a clear and definite offer by one party (the
offeror) to enter into a contract, and an unequivocal acceptance of that offer by the other party
 (the offeree). Both the offer and acceptance must be communicated effectively and without
ambiguity.
 Consideration: There must be something of value exchanged between the parties as part of the
agreement. Consideration can take various forms, such as money, goods, services, or a promise
to do or refrain from doing something.
 Legal Capacity: The parties entering into the contract must have the legal capacity to do so. This
means they must be of legal age and mental competence, and not under duress, undue
influence, or intoxication at the time of entering into the contract.
 Legal Purpose: The purpose of the contract must be lawful and not contrary to public policy.
Contracts that involve illegal activities, fraud, or harm to third parties are not valid.
 Certainty of Terms: The terms of the contract must be sufficiently clear, definite, and certain to
enable the parties to understand their rights, obligations, and remedies under the agreement.
Vague or ambiguous terms may render the contract unenforceable.
 Consent: The parties must enter into the contract voluntarily and with full understanding of its
terms and implications. Consent must be free from fraud, misrepresentation, mistake, or duress.
 Form: While most contracts do not require a specific form to be valid, certain contracts, such as
those involving real estate or sales of goods over a certain value, may need to be in writing and
signed by the parties to be enforceable.

Q15.Discuss the various environmental and social issues related to Construction projects.

Construction projects can have significant environmental and social impacts, which need to be carefully
considered and managed to minimize adverse effects. Some of the key environmental and social issues
related to construction projects include:

 Habitat Destruction: Construction activities often result in the destruction of natural habitats,
including forests, wetlands, and wildlife habitats, leading to loss of biodiversity and disruption of
ecosystems.
 Air and Water Pollution: Construction activities can generate dust, emissions, and runoff
containing pollutants such as sediment, chemicals, and construction waste, which can
contaminate air and water resources, degrade water quality, and harm human health and
ecosystems.
 Resource Depletion: Construction projects consume large amounts of natural resources,
including energy, water, and raw materials, contributing to resource depletion, increased energy
consumption, and greenhouse gas emissions.
 Noise and Visual Impact: Construction sites can generate noise pollution and visual blight,
disrupting nearby communities, affecting quality of life, and causing stress and annoyance to
residents.
 Occupational Health and Safety: Construction workers are often exposed to hazardous working
conditions, including risks of falls, accidents, exposure to harmful chemicals, and occupational
diseases, highlighting the importance of implementing robust health and safety measures.
  Community Displacement: Large-scale construction projects may require land acquisition and
displacement of communities, leading to social conflicts, loss of livelihoods, and disruption of
traditional lifestyles.
 Cultural Heritage Preservation: Construction projects may impact cultural heritage sites,
monuments, and archaeological resources, requiring measures to mitigate damage and preserve
cultural heritage values.

Q16. Discuss probability of meeting a schedule time in PERT networks.

In PERT (Program Evaluation and Review Technique) networks, the probability of meeting a schedule
time is determined by analyzing the variability in the estimated project completion time. PERT accounts
for uncertainty in activity durations by using three time estimates for each activity:

 Optimistic Time (a): The shortest time that an activity could realistically be completed under
favorable conditions.
 Most Likely Time (m): The best estimate of the time required for the activity based on typical
conditions and past experience.
 Pessimistic Time (b): The longest time that an activity might take under unfavorable conditions.

The total project completion time variance is then calculated by summing the variances of all activities
along the critical path. Finally, the standard deviation of the project completion time is calculated as the
square root of the total variance.

From the standard deviation, the probability of meeting a schedule time can be determined using the
normal distribution. For example, if the project completion time follows a normal distribution,
approximately 68% of projects will be completed within one standard deviation of the mean completion
time, 95% within two standard deviations, and 99.7% within three standard deviations.

Q19.Discuss various types of tenders giving suitability of each.

Tenders are a common method used in procurement processes to invite bids or proposals from
potential suppliers or contractors for the provision of goods, services, or construction projects. There
are several types of tenders, each suitable for different procurement needs and circumstances. Here are
some of the most common types of tenders and their suitability:
 1) Open Tender: In an open tender, the invitation to bid is publicly advertised, and any interested
supplier or contractor can submit a bid. Open tenders are suitable for procurements where
there is a large pool of potential suppliers, and transparency and competition are important.
2) Restricted Tender: A restricted tender involves inviting a select group of prequalified suppliers
or contractors to submit bids. This type of tender is suitable when the procurement requires
specialized expertise or qualifications, and only a limited number of suppliers are capable of
meeting the requirements.
3) Selective Tender: Similar to a restricted tender, a selective tender involves inviting a specific
group of suppliers or contractors to submit bids based on criteria such as past performance,
reputation, or capability. This type of tender is suitable for procurements where quality and
reliability are paramount, and the buyer wishes to work with known suppliers.
4) Single-Stage Tender: In a single-stage tender, bidders submit their technical and financial
proposals simultaneously. This type of tender is suitable for straightforward procurements with
well-defined requirements and specifications.
5) Two-Stage Tender: A two-stage tender involves an initial stage where bidders submit technical
proposals only, followed by a second stage where shortlisted bidders are invited to submit
financial proposals. This type of tender is suitable for complex or innovative projects where
technical details need to be discussed before final pricing.
6) Negotiated Tender: In a negotiated tender, the buyer negotiates directly with one or more
suppliers or contractors to finalize the terms of the contract. This type of tender is suitable for
procurements where flexibility and customization are required, or when the project scope is not
fully defined at the outset.

Q20.Discuss project management information system (PMIS) mentioning its need, framework and

functions.

A Project Management Information System (PMIS) is a digital platform or software tool designed to
facilitate project planning, execution, monitoring, and control by providing centralized access to project-
related data and tools for project management activities. Here's a detailed discussion on the need,
framework, and functions of a PMIS:

Need for PMIS:

 Centralized Data Management: PMIS serves as a centralized repository for storing and managing
all project-related information, including project plans, schedules, budgets, resources, tasks,
risks, and documents. This centralized access ensures data consistency, accuracy, and availability
to all project stakeholders.
 Improved Communication and Collaboration: PMIS facilitates effective communication and
collaboration among project team members, stakeholders, and other relevant parties. It
provides features like messaging, discussion forums, document sharing, and virtual meetings,
enabling seamless interaction and exchange of information.
  Real-time Monitoring and Control: PMIS enables real-time monitoring of project progress,
performance, and key metrics. Project managers can track project status, identify issues or
delays, and take timely corrective actions to keep the project on track and within budget.
 Resource Optimization: PMIS helps optimize resource allocation and utilization by providing
insights into resource availability, workload, and allocation across multiple projects. It enables
better resource planning, allocation, and management, leading to improved efficiency and
productivity.
 Risk Management: PMIS supports comprehensive risk management by facilitating the
identification, assessment, prioritization, and mitigation of project risks. It allows project
managers to track risks, monitor risk indicators, and implement risk response strategies to
minimize potential impacts on project objectives.

Framework of PMIS:

 Data Management: PMIS serves as a centralized database for storing, organizing, and managing
project-related data. It includes project plans, schedules, budgets, resources, tasks, milestones,
risks, issues, and documents.
 Communication and Collaboration: PMIS provides communication and collaboration tools to
facilitate interaction among project team members, stakeholders, and external partners. It
includes features like email integration, messaging, discussion forums, file sharing, and virtual
meetings.
 Planning and Scheduling: PMIS supports project planning and scheduling activities by providing
tools for creating, managing, and updating project plans, schedules, milestones, dependencies,
and critical paths.
 Monitoring and Reporting: PMIS enables real-time monitoring of project progress, performance,
and key metrics through dashboards, reports, and analytics. It allows project managers to track
project status, analyze variances, and generate custom reports to communicate insights to
stakeholders.
 Document Management: PMIS facilitates document management by providing a centralized
repository for storing, versioning, and sharing project documents, such as requirements,
designs, specifications, contracts, and reports.

Functions of PMIS:

 Project Planning: Creating, updating, and managing project plans, schedules, budgets, resources,
and tasks.
 Task Management: Assigning tasks, tracking progress, managing dependencies, and allocating
resources to ensure timely completion of project activities.
 Risk Management: Identifying, assessing, prioritizing, mitigating, and monitoring project risks
and issues to minimize their impact on project objectives.
 Communication and Collaboration: Facilitating communication and collaboration among project
team members, stakeholders, and external partners through various channels and collaboration
tools.
 Monitoring and Control: Monitoring project progress, performance, and key metrics in real-
time, identifying deviations from the plan, and implementing corrective actions to keep the
project on track.
 Reporting and Analytics: Generating standard and ad-hoc reports, dashboards, and analytics to
provide insights into project performance, trends, and areas for improvement.