mba-3-sem-project-management-march-2013

mba-3-sem-project-management-march-2013

Master of Business Administration (MBA) Examination

III Semester

Project Management

Time : 3 Hours)                                                                                               [Max. Marks : 80


Section A

1. Establish the need and importance of Project Management. Explain the various phases of Capital Budgeting.

2.         (a) A successful human relations system is essential for successful execution of a project. What are the problems and challenges, a project manager is called upon to handle?

(b) Explain the concept of Time Value of Money with suitable example:

3.         (a) What are the components of Cost of Project? Discuss briefly.

(b) What are the various sources of Project Finance?

4.         Write short notes on any two of the following :

(a) Investment Strategies                                (b) Demand Forecasting.: ,

(c) Technical Analysis for a Project                (d) Abandonment Analysis.

Section A

5. (a) Mr. 'X' deposits Rs. 1,00,000 in a bank, which pays 10 percent interest. How much he should withdraw annually for a period of 30 years ? Assume that at the end of 30 years, the amount deposited whittle down to zero.

(b) What is the present value of perpetuity of the constant annual payment of Rs. 10,000, if the rate of interest is 10 percent?

6. The expected cash flows of a project are :

Year    Cash Flows (Rs.)

1          -1,00,000

2          20,000

2          30,000

3          40,000

4          50,000

5          30,000

The cost of capital is 12 percent.

Calculate the following :

(d) NPV          (e) Benefit-Cost Ratio

(f) IRR                        (g) Pay-Back   Period

(h) Discounted Pay-Back Period.

7.         International Funds has the following capital structure :

                                                                                                                                                Book Value     Mkt Value

                                                                                                   (Rs.)                          (Rs.)

Equity Capital                                                                            2,50,00.000          4,50,00,000

(25 lakh shares of Rs. 10 per)

Pref. Capital                                                                               50,00,000             45,00,000

(50,000 shares Rs. 100 par, carrying 13% dividend)

Res. And Surplus                                                                       1,50,00,000

Debentures                                                                                 1,50,00,000          1,45,00,000

(1,50,000 debentures of Rs. 100 par carrying 14% interest)

                                                                                                   6,00,00,000          6,40,00,000

The expected dividend per share is Rs. 1.40. The dividend per share is expected to grow at a rate of 8% forever. Pref. Shares are redeemable after 5 years, whereas the debenture are redeemable after 6 years. The tax rate of the Co. is 50%. Calculate the WACC for the existing capital structure using mkt. value proportions as weights.

8.         Fit a straight line trend to the following data using the method of least squares. From the straight line trend, estimate the demand for the year 2002 :                                           

Year (x)           -           1995    1996    1997    1998    1999    2000    2001

House-hold                                                                            

Heaters (y)      -           600      825      970      1210    1440    1790    2070

(in thousands)

9.         The activities, duration and direct activity costs of a project are :

Time in Weeks                          Costs (Rs.)

Activity         Normal         Crash         Normal               Crash

1-2                 6                   3                40,000                70,000

1-3                 5                   3                30,000                52,000

2-4                 2                   1                60,000                84,000

3-4                 10                 6                70,000                98,000

2-5                 3                   2                45,000                63,000

4-5                 4                   2                26,000                50,000

The indirect costs are Rs. 10,000 per week.

(a)     What is the minimum time in which this project can be completed? What is the minimum cost at which this can be done?

(b)     What activities should be crashed to minimize the total cost?