Question 3 (a) Financial evaluation is an import step in theproject management.
(i) Explain what is meant by Cost Benefit Analysis and, usingtwo project examples, discuss benefits of such analysis. [2marks]
(ii) Discuss the advantages and disadvantages of threetechniques used for project investment appraisal. [4 marks]
(iii) Projects A and B are competing for funds. With an originalinvestment of €1,000 and returns given in Table Q3, determine usingappropriate project financing evaluation techniques whether thecompany PTO 5 should choose projects A or B? Provide calculationsto justify your recommendation. Use 10% discount rate in yourcalculations.
Table Q3 – Table of project returns Project A Project B Year 1€200 €0 Year 2 €500 €0 Year 3 €400 €700 Year 4 €0 €700 Year 5 €500€500 [7 marks]
(b) There is a variety of organization structures. (i) Discusseach type of structure and draw their schematic diagram. [4marks]
(ii) For each type of structure summarize in a tabular form: •What is the Project Manager’s authority (range: little, limited,moderate high, total) • Who controls the project budget (range:Functional Manager, Project Manager) • Project manager’s role(range: full-time, part-time). Use this information to explainmajor differences between them. [3 marks]
