Icfai Proj. Apr. Test I

ICFAI BUSINESS SCHOOL MBA III Project Appraisal (Test I) Select an appropriate option for the following statements: 1. Which of the following statement/s is/are true? a. A project is an ad hoc activity of the firm. b. A project should be viewed as the main activity of the firm. c. A project should be viewed as something that contributes to the ability of the organization. d. A project is a thing which contributes to the ability of the project manager. e. None of the above. 2. Which of the following statement/s is/are true? a. People who give brilliant ideas from their knowledge and experience can very well manage in getting their ideas implemented. b. People who give brilliant ideas will always fail in getting things done. c. People who are good at handling things will always possess creative thinking. d. People who have great ideas are not necessarily good implementers. e. Both (b) and (d) above. 3. Which of the following is/are ‘external reasons’ for project failure? a. Dispute with local people. b. Non-availability of skilled personnel. c. Inflation d. Labor disputes e. All of the above. 4. In which of the following situation is the bargaining power of buyers low? a. The buyers are few and volumes are high. b. There are alternative sources of supply for the buyers. c. Backward integration by the buyers is difficult. d. Value addition made by the seller is low. e. Both (c) and (d) above.

5. Which of the following is not a component of the life cycle costs? a. Costs of R & D. b. Budgeted costs of the entire project. c. Production, operating and maintenance costs. d. Construction costs. e. Phase out costs. 6. Which of the following is not a phase of project life cycle according to David Cleland? a. Conceptual b. Contract c. Full scale development d. Production e. Development 7. Which of the following is not considered while analyzing the business environment as per PEST Model? a. Foreign trade regulation b. Disposable income levels c. Levels of education d. Human resource management of the firm e. Rates of obsolescence 8. In which of the following conditions there is a high likelihood of entry of competitors into an industry? a. The economies of scale are high b. The capital required to set up a venture is high c. The profitability of an organization depends upon a wide distribution channels d. The existing players in the industry have a history of strong retaliation to any firm attempting to enter the industry e. There is a low degree of product differentiation in the industry 9. Michael Porter’s five force model is designed to a. Evaluate various management strategies and to select the strategy which is suitable to the firm. b. Analyze the competitive position of a firm. c. Analyze and review the performance of a project. d. Allocate the budgets to various departments. e. None of the above.

10. According to the Porter’s Model the ‘Competitive Advantage’ of a firm depends, apart from other factors, on: a. Economies of scale b. Socio-cultural factors c. Political factors d. Business cycles e. Unemployment. 11. Which of the following statements is/are true as per BCG’s Matrix? a. Stars produce at lot of surplus but have no potential growth. b. Question marks have low market growth and low market share. c. Surpluses can be invested in dogs because they have a high market growth. d. Cash cows produce a lot of surplus, but have low potential for growth. e. None of the above. 12. The likely outcome of conglomerate diversification in terms of profitability, growth and risk respectively is a. High, Moderate, Moderate b. Moderate, High, Low c. High, Moderate, High d. Moderate, Low, High e. High, High, Low 13. When the raw material to sales ratio in a manufacturing project is low, we may say that the value is a. Low b. Moderate c. High d. Insufficient data e. None of the above 14. Resource allocation at the corporate level is made a. On the basis of business functions like marketing, finance, production, etc. b. On the basis of geographical area c. On the basis of the importance of the service rendered d. Both (a) and (c) above e. All of (a), (b) and (c) above

15. Which of the following statements is/are true? a. Capital rationing exists when funds available for investment are inadequate to undertake all projects which are otherwise acceptable. b. Internal rationing is caused by a choice of hurdle rate higher than the cost of capital c. External rationing arises by setting the limit to capital expenditure amounts d. Both (a) and (b) above e. All of (a), (b) and (c) above 16. A ‘Moving Average’ is a. An example of time series models b. An example of cause and effect models c. Used when the variable being studied is to exhibit a steady trend over time d. Both (a) and (c) above e. Both (b) and (c) above 17. ‘exponential Smoothing’ is a. Useful only when data for a large number of periods is available. b. A variant of weighted moving average c. Useful when there are seasonal variations d. Both (a) and (b) above e. All of (a), (b) and (c) above 18. ‘Multiple Regression’ Model a. Is used when there is only one independent factor which affects the variable b. Can be used to study the degree of association of any number of independent factors on the variable c. Is a causal model in which the variable is regressed with many causative factors in a predetermined sequence d. Depends on the accuracy with which causative factors have been identified e. Both (b) and (c) above 19. Price Elasticity of Demand is a. The ratio of change in price to current demand b. The ratio of change in demand to change in price c. The ratio of change in price to change in demand d. The ratio of change in price to total demand e. The ratio of current price to current demand

20. Delphi Method is a a. Technique in which the executives are asked to forecast demand subjectively b. Salesmen of different territories are asked to collect information regarding buying plans of users c. Technique in which several experts are asked to give opinion independently d. Technique in which a group discussion is conducted to pool up creative ideas e. None of the above 21. Last year per capita annual income level of the residents of Bopal was Rs.96,000 and this year it is expected to be Rs.1,05,600 with a 3% increase in population. Actual demand of milk was 25,000 liter in the last year. Considering income elasticity of demand for milk is 1.10, how much milk (in liter)would be in demand this year? a. 22,123 b. 22,464 c. 28,597 d. 29,548 e. 30,152 22. Which of the following is the most subjective method of demand forecasting? a. Delphi Method b. Chain Ratio Method c. Econometric Method d. Moving Average method e. Trend Projection Method 23. Which of the following is not a problem in collecting primary data? a. Part of accuracy is lost due to sampling b. The reliability tends to be lower when opinions instead of facts are collected c. Respondents may either refuse to answer or not reveal the truth when the information asked is confidential or embarrassing d. The presence of a third person or the body language of the interviewer may also affect the responses e. Analysis may be difficult, as the data specifically required cannot be collected

24. Matrex Ltd. has sold the following mattresses during 1st quarter of 2005-96. Month Units April 20,000 May 25,000 June 28,000 The sales manger forecasted to sell 30,000 mattresses per month during the 1st quarter. If the adjustment factor is 0.25, the forecast (in no. of units) as per exponential smoothing method is a. 28,580 b. 29,500 c. 77,250 d. 85,750 e. 88,500 25. A market analyst believes that the future consumption of a product can be projected using linear relationship of the firm, Yt = a + bt Where Yt = quantity demanded in year t t = time variable Which of the following methods can be used to estimate a and b? a. Visual curve fitting method b. Exponential smoothing method c. Least square method d. Both (a) and (c) above e. All of (a), (b) and (c) of the above