MOCK FINAL EXAM – PROJECT MANAGEMENT 2023

This is the closed-book exam, so students are not allowed to use any
documents (slides, textbooks…) or any electronic devices (except one
calculator). Students need print out time value of money table and
normal distribution table)
The final exam will include two parts: 6 MCQs and 2 exercise questions.

PART 1: 6 multiple choice questions (6 questions in this part are any questions below
and there must be at least one theoretical question). The theoretical question can be
any part in the course syllabus (4 points)
1. Your company is seriously considering investing in a new project opportunity but cash
flow is tight these days. Top management is concerned about how long it will take for this
new project to pay back the initial investment of $50,000. You have determined that the
project should generate inflows of $30,000, $30,000, $40,000, $25,000, and $15,000 for
the next five years. Assume that a required rate of return for your company is 12% and
that inflation is currently expected to remain steady at 3% for the life of the project. The
discounted payback period is ___________ and NPV of this project is __________
2. Assume that your firm wants to choose between two project options:
• Project A offers the following opportunity: $500,000 invested today will yield an
expected income stream of $150,000 per year for 5 years.
• Project B requires an initial investment of $400,000, but its expected revenue
stream is: Year 1 = 0, Year 2 = $50,000, Year 3 = $200,000, Year 4 = $300,000,
and Year 5 = $200,000.
Assume that a required rate of return for your company is 10% and that inflation is currently
expected to remain steady at 3% for the life of the project. The better investment
is__________
3. Activities in the diagram which have slack are_________
B, C and D
(1, 18 & 1)
LS of activity C is__________
EF of activity D is__________
6
6
29 35 38
0 38
29 35
0

8 17
9 18

ACGH =20
AEFGH = 38
ADFGH = 35
BDFGH = 37
4. The AOA network described by this table needs_____________ dummy activities.
Activity Predecessor
A --
B --
C A, B
D B
E C

5. Using the following data, calculate schedule variances and cost variances through the
end of June. Assume the project is planned for a 12-month duration and $250,000 budget,
estimated time to completion is___________ and estimated cost to completion
is__________

Activity Jan Feb Mar Apr May Jun Plan %C Value

Staffing 8 7 15 100
Blueprinting 4 6 10 100
Prototype
Development 2 8 10 70
Full Design 3 8 10 21 67
Construction 2 30 32 25
Transfer 10 10 0
Monthly Plan
Cumulative
Monthly Actual 10 15 6 14 9 40
Cumul. Actual

6. Assume the following information:

Probability of Failure Consequences of Failure
Maturity = 0.3 Cost = 0.1
Complexity = 0.3 Schedule = 0.7
Dependency = 0.5 Performance = 0.5
The Overall risk factor for this project is__________ , therefore this would be classified
as__________ (Low, medium or high risk)
7. A project manager is using a simple scoring model to decide which of four projects is
best, given the company's limited resources. The criteria, importance weights, and scores
for each are shown in the table. The project which should be chosen is___________
Importance
Project Criteria Weight Score
Greenlight
1 1 3
2 2 1
3 3 1
Runway
1 1 2
2 2 2
3 3 1
X
1 1 2
2 2 3
3 3 2
Ilevomit
1 1 2
2 2 2
3 3 3

8. Companies that are structured by grouping people performing similar activities into
departments are_____________
A major player in the software industry stumbles from one new edition of its operating
system and office automation package to another. As soon as one package is released, the
programmers and developers have two weeks to latch onto a different team that is updating
a different package. Failure to find another team to work for means an end to their
employment. This organizational structure is best classified as a_____________
John Drone toils endlessly at Hurts Corporation on his routine assignment and also on a
number of project teams. His annual evaluation features input from his line manager and
each of the project managers, all of whom have equal say in how his 12-hour work day is
partitioned. John Drone is employed by a_____________
9. The community spent a day raising Joseph Stoltzfus' barn and by the time the sun was
down, he was ready to put his horses in the stalls. This project is an example of termination
by ________.
The three credit hour Paris Study Tour was extremely popular for two reasons: the class
focused solely on popular tourist destinations rather than business disciplines and they went
to Paris. Rather than disband the project team, the Paris group became a formal
International Experience group within the college, resulting in its termination by ________.
Activity and funding for the CEO's pet project stopped during the economic downturn and
even after her retirement the file remained open. A few years and 30% turnover later, many
employees didn't know the purpose of the half-finished obelisk in the cafeteria. The obelisk
was fated to a permanent half-finished state thanks to its termination by ________.
10. Consultations with a client cost $50 and copying a page costs $1. Once we know how
many consultations and copies are needed, we can estimate the cost of the divorce project
thanks to our ________ approach to budgeting.
________ begins with the work packages of the work breakdown structure and specifies
funds that are needed to support the tasks. These costs are aggregated by managers and
duplicate costs are removed as managers' budgets are combined.
11. The unofficial rule of thumb for ________ estimates is to aim for an accuracy of plus
or minus 30%.
________ cost estimates can only be given upon the completion of most of the design work
at a point when the scope and capabilities of the project are well-understood.
PART 2: 2 exercise questions (6 points, 1st question has 4 points and the 2nd question
has 2 points)
1. Using the following information and answer questions below:

Activity Preceding activities Best Likely Worst

A - 12 15 25

B A 4 6 11

C - 12 12 30

D B, C 8 15 20

E A 7 12 15

F E 9 9 42

G D, E 13 17 19

H F 5 10 15

I G 11 13 20

J G, H 2 3 6

K J, I 8 12 22

1.1. Calculate each activity TE (rounding to the nearest integer, e.g: 17.1; 17.2; 17.3; 17.4
-> 17 and 17.5; 17.6; 17.7; 17.8; 17.9 -> 18), its early start early finish, late start and late
finish times, and slack for each activity. Finally, show all paths in the project with their
length and the project’s critical path with total duration.

1.2. Now, assume that activity E has taken 10 days past its anticipated duration to complete.
What happens to the project’s schedule? Has the duration changed? Is there a new critical
path? Show your conclusions.

1.3. What is the likelihood of the project finishing on day 84 (before 84 days)? Suppose
you wanted to have a 99.98% confidence in the project finishing on time. How many
additional days would your project team need to negotiate for in order to gain this 99.98%
likelihood? (There will be only one question of probability in the final exam)

1.4. Assume that each activity needs four hours per day to this project with work taking
place on a 5-day-per-week basis. Answer the following questions.
What is the total resource requirement for the project? And for Activity G…?
2. (In the final exam, the 2nd exercise question will be one of two below crashing
exercises)
2.1 A project has the activity duration and cost information indicated in the table where all
times are in weeks. There is a penalty of $5,000 per week for every week the project
extends beyond 45 weeks. What is the lowest total cost for completing this project?
Normal Normal Crash
Activity Predecessor Time Cost Time Crash Cost
A -- 8 $12,000 5 $21,000
B A 12 $20,000 9 $30,000
C A 15 $24,000 10 $60,000
D B 3 $10,000 2 $15,000
E C 9 $17,000 6 $34,000
F E 7 $5,000 6 $6,000
G D 8 $14,000 6 $20,000
H A 12 $22,000 10 $30,000
I H 6 $50,000 5 $55,000
J F, G, I 11 $33,000 9 $50,00

2.2. A project has the activity duration and cost information indicated in the table where
all times are in weeks. What is the lowest total cost for completing this project in 40 days/38
days/36 days?
Normal Normal Crash
Activity Predecessor Time Cost Time Crash Cost
A -- 8 $12,000 5 $21,000
B A 12 $20,000 9 $30,000
C A 15 $24,000 10 $60,000
D B 3 $10,000 2 $15,000
E C 9 $17,000 6 $34,000
F E 7 $5,000 6 $6,000
G D 8 $14,000 6 $20,000
H A 12 $22,000 10 $30,000
I H 6 $50,000 5 $55,000
J F, G, I 11 $33,000 9 $50,000