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This question paper consists of"'THRES,FAGES 'of :questions printed on both sides of the

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SEPTEMBER SEMESTER 201 1FINAL EXAMINATION

PROJECT COST ANALYSIS & APPRAISAL

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PART A

INSTRUCTIONS: 1. THERE ARE TWO (2) OUESTTONS rN THrS PART.t. THERE ARE Two (2) ouESTroNS tN THls pART. I -,r, 1 Q

2. ANSWER BorH euESroNS. ,)**"[#* ry'"/|:",fr, -*-4n':X:/^*r':' * ^ ',*%r*{*lr'J.i<'*U h 5'i;^l,';T::J; i;;r1, r'ro.4"r-"J?, r f

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euestion 1 "' ',r' +"- 'u;'ifri, q;*'i,f l[A "^'Discuss THREE (3) reasons why it becomes particularly difficult to do

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(CBA) for Government projects?

Support your answers with appropriate illustrations and examples.

IOTAL: 20 MARKSI

Auestionz

"/ When dealing with project cost appraisal and analysis, the Pareto's rule was the earliest

logical criterion for proving that whether a policy change, or any other change, is beneficialto

the public and society. i{owever, later Kaldor-Hicks rule has become so popular among

policy makers.

Discuss TWO (2) differences between the two rules.

Support your answers with appropriate illustrations and exampfes.

FOTAL: 20 MARKSI

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PART B

INSTRUCTIONS: 1. THERE ARE FIVE (5) OUESTIONS IN THIS PART.2. ANSWER THREE (3) OUESTIONS ONLY.

Question 1

Many times in a cost-benefit study there will be changes in quantities for which there is nomarket' Projects may alter the risk of death, health or safety, they may waste or save time,or they may stimulate business in some area.

Explain how some allied market, where the price or quantities change, can be used to infervaluations for loss of life.

support your answers with appropriate iilustrations and exampres.

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[roTAL:20 MARf(S]

Question 2

An approach to doing human investment evaluations would be to get a small sample, but tofollow subjects for a long duration.

Discuss the relevance of preschool education projects to this approach of human investmentevaluation.

support your answers with appropriate iilustrations and exampres.

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IOTAL: 20 MARKS]

,/,Ftestion 3

/ Experience with projects over time has indicated that the long-term success of developmentprojects and the sustainability of project benefits depend on a number of project qualityfactors, over and above the economic and financiar viabirity of the project.

Discuss TWO (2) of the project quality factors.

support your answers with appropriate iilustrations and exampres.

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IOTAL: 20 MARKS]

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Question 4

often the private investors are only interested in the financial profitability of a project.However, some financially profitable project may have good as well as bad effects on thesociety which cannot be reflected at the level of financial analysis. Such external effectsshould be dealt with in the economic analysis.

Explain TWO (2) Oi an economic analysis.

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ln performing an economic feasibility studfof a highway project, social benefits and costs,both tangible and intangible, should be identified. .

Discuss oNE (1) intangible social benefit and oNE (i) intangible social cost of a highwayproject.

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support your answers with appropriate iilustrations.and exampres.

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