Addis Ababa University

College of Business and Economics

Department of Management
Project Management Final Exam, 2026
Time Allowed: 2:00
Name:________________________________________ID.No: ________Section: ____________
Name of Your Project____________________________________________________________

General Instructions:
❖ Make sure that the exam has 10 pages.
❖ Give the multiple-choice answer in the following table.
❖ Any attempt to cheat will nullify your work.
❖ Bringing your phone into the exam room is strictly prohibited.

Part I Multiple Choice

1 7 13 19 25 31 37
2 8 14 20 26 32 38
3 9 15 21 27 33 39
4 10 16 22 28 34 40
5 11 17 23 29 35
6 12 18 24 30 36

Answer Part II question on the space provided on the question paper.

NB: Writing and/or putting any mark on the question paper (for multiple-choice questions)
is 100% PROHIBITED

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 Part I Multiple Choice!

1. Which of the following statements are FALSE regarding the project scope management
plan?
A. The project scope management plan is contained within the project management
plan.
B. The project scope management plan identifies the influence and interest of the
stakeholders and documents their expectations
C. The project scope management plan is an output of the Scope Planning process
D. The project scope management plan describes how the project scope will be
defined and managed by the project scope management team
E. The project scope management plan specifies how formal verification and
acceptance of the project deliverables will be satisfied
2. The Oromia regional government just finished its five‑year plan. One of the main goals is to
become self‑sufficient in wheat. So the agriculture bureau starts looking for land and water
sources to put up new medium‑scale irrigation schemes. Where does this project idea come
from?
A. Reviewing how existing flour mills are running
B. Noticing what people buy in other countries
C. The government’s own stated policies and priorities
D. Asking farmers about their unmet emotional needs
3. In a small district of the Sidama region, a local cooperative didn’t wait for orders from above.
They went door to door, talked to coffee farmers, and found out that most farmers lose
money because they can’t wash and dry their beans properly. So the cooperative proposed
building a simple washing station. This is a good example of which approach?
A. Top‑down C. A UNIDO opportunity study
B. Bottom‑up D. An import substitution strategy
4. A textile factory in Addis Ababa currently buys special zippers from Turkey. The shipment
takes three months and costs a lot. Someone realizes that another factory right across the
street could make those same zippers cheaper and deliver in one week. This idea came from
looking at:
A. What other industries are buying and producing (input‑output)
B. Import and export trends of the whole country
C. A new technology shown at a trade fair
D. Changes in consumer fashion tastes

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5. A group of students at Addis Ababa University visits a maternity ward and observes that
women after childbirth often struggle to find sanitary pads large enough for postpartum
bleeding. The available products are either too small, uncomfortable, or too expensive. The
students decide to fill this gap by producing a reusable, comfortable, large‑size maternity pad.
The students’ project idea mainly came from:
A. A national policy on maternal health
B. Observing a real problem and unsatisfied need in the community
C. An import substitution study of sanitary products
D. A directive from the Ministry of Education
6. At Addis Ababa University, a graduating class is divided into groups of six students. Their
professor orders each group to prepare a project feasibility study. Each member must bring
three project ideas individually, giving the group a total of 18 ideas. Every student presents
their ideas. After debate and discussion, the group selects three ideas to move forward with
based on specific criteria.
This process of generating many ideas, presenting them, debating, and then narrowing down
using criteria is closest to which combination of idea generation methods described in the
chapter?
A. Brainstorming followed by screening
B. Import substitution analysis and top‑down planning
C. Review of past projects and government policy review
D. Observation of natural calamities and SWOT analysis
7. A new irrigation project in the Amhara region starts with a simple idea: using unused river
water to grow vegetables during the dry season. The project team then collects basic
information about soil, water flow, and nearby markets. According to the Baum (World Bank)
project cycle, which stage is this?
A. Preparation C. Identification
B. Appraisal D. Negotiation
8. A textile factory in Addis Ababa wants to expand. Before doing a full study, the owners order
a cheaper, quicker study that looks at general market trends, raw material availability, and
possible export opportunities. This type of study is called a:
A. Support study
B. Pre‑feasibility study
C. Specific opportunity study (enterprise approach)
D. Appraisal report

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9. A proposed hydropower dam in the Benishangul‑Gumuz region is appraised by the Ministry
of Finance. The appraisal team finds that the financial calculations are fine, but the project
will displace many families without compensation. According to the Baum model’s appraisal
requirements, which aspect of the project should have covered this?
A. Technical aspect C. Economic and social aspect
B. Commercial aspect D. Managerial aspect
10. The World Bank’s original Baum model had four stages. Later, two more were added. Which
two stages were added in 1978?
A. Pre‑feasibility and feasibility
B. Negotiation and evaluation
C. Identification and preparation
D. Implementation and operation
11. A group of engineering students at Addis Ababa University proposes a small solar‑powered
water pump for a rural school. Their professor tells them to first check if a similar project has
been tried elsewhere, look at local demand, and see if spare parts are available. The students
are essentially doing a quick version of what UNIDO calls __________:
A. Opportunity study D. Support study
B. Appraisal report E. None
C. Operating phase analysis
12. A donor agency agrees to fund a road construction project in the Tigray region. Before
releasing the money, they sit down with the regional government to discuss interest rates,
repayment schedules, and co‑financing arrangements. This step in the Baum cycle is called:
A. Evaluation D. Identification
B. Negotiation E. None
C. Implementation
13. The Ethiopian Development Project Studies Authority (DEPSA) developed its own model of
the project cycle. According to that model, which three main phases are used?
A. Identification, preparation, operation
B. Pre‑investment, investment, operation
C. Planning, execution, closure
D. Idea generation, appraisal, implementation
E. A and C

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14. A team is assigned to build the new Addis Ababa light rail extension. The work has a clear start
date, a fixed completion date, a set budget, and the team will disband once the rail line is
operational. This is best described as:
A. A functional or line operation
B. A project
C. A routine manufacturing processes
D. A continuous improvement programs
15. Which of the following is NOT a typical feature of a project according to the chapter?
A. It is non‑repetitive
B. It has a defined start and end time
C. It continues indefinitely with the same team
D. It creates a capital asset
E. None
16. A local government in Ethiopia has a fixed budget to build primary schools. The grant cannot
be exceeded, so the project manager decides to reduce the number of classrooms rather than
go over budget. Which constraint is given the highest priority here?
A. Time C. Cost
B. Quality D. Safety
17. A pharmaceutical company develops a new vaccine. The performance specification must be
met regardless of delays or cost overruns. In this case, which element of the triple constraint
is most important?
A. Cost C. Scope (performance)
B. Time D. Safety alone
18. Four project management criteria are listed in a specific order of importance. Which sequence
is given?
A. Cost, time, performance, safety C. Time, cost, safety, performance
B. Safety, performance, time, cost D. Performance, safety, cost, time
19. A new hospital project in Addis Ababa involves the sponsor, the project team, future patients,
nearby residents who oppose the construction, and suppliers of medical equipment. All of
these are considered:
A. Project constraints
B. Project stakeholders
C. Project knowledge areas
D. Project deliverables

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20. By the 1990s, both profit and nonprofit sectors realized they needed formal project
management because:
A. Projects had become smaller and simpler
B. The size and complexity of their activities were unmanageable without it
C. Government’s regulations
D. Functional organizations no longer existed
21. A housing project in Ethiopia is delayed because of bad weather. However, the final houses
are built well and within budget. Even if a project is not on time, it can still be a success, but it
may have caused:
A. A safety violation
B. A financial loss
C. A permanent change in scope
D. A loss of stakeholder interest
22. A large sugar factory expansion project in Ethiopia requires the project manager to apply
knowledge, skills, tools, and techniques to meet project requirements. This overall application
is called:
A. Project stakeholder analysis
B. Project management
C. Functional line management
D. Operational planning
23. A road construction project in the Amhara region is divided into major parts, and each part is
further broken down into smaller sub‑parts until manageable work units with clear
responsibility are defined. This systematic breakdown is known as:
A. Bar chart
B. Work breakdown structure (WBS)
C. Network diagram
D. Hierarchy of plans
24. A project manager uses a simple planning tool where activities are shown as horizontal bars
on a time axis. It is easy to understand and can show progress, but it cannot show
interrelationships between activities. This tool is called:
A. Gantt chart
B. PERT network
C. Critical path method
D. Level III plan

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25. A project manager wants to know not just past cost overruns but also whether the rate of
work is accelerating or decelerating. The traditional variance analysis approach is inadequate
for this because it is:
A. Forward looking only
B. Backward looking rather than forward looking
C. Too complex for field use
D. Based on physical milestones only
26. To minimize time overruns in a large dam project, the project team starts acquiring land,
securing clearances, and calling tenders before the full feasibility study is even completed,
because the project appears prima facie viable. This practice is called:
A. Turnkey contracting
B. Advance action
C. Performance analysis
D. Work breakdown
27. A monitoring report for a rural electrification project shows that actual progress is behind
schedule, but the report was delivered three weeks late and contains unreliable data.
According to the material, this is an example of:
A. Effective variance analysis
B. Poor control and information system
C. Sound project organization
D. Advance action
28. Ethiopian Airlines wants to build a new cargo terminal. The government requires an
assessment of how the terminal will affect nearby wetlands and bird migration routes. This
type of assessment is called:
A. Market analysis
B. Environmental impact assessment
C. Financial feasibility study
D. Organizational design
29. A large flower farm near Ziway is expanding. The project manager draws a chart showing the
flow of flowers from harvesting to cold storage to packing to truck loading. This chart is best
described as a:
A. General functional layout D. Utility consumption layout
B. Material flow diagram E. None
C. Communication layout

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30. Heineken Ethiopia is setting up a new brewery. The project organization gives the project
manager full line authority over a separate division with its own personnel. However, this may
lead to inefficient use of resources and duplication of specialists. This type of project
organization is called:
A. Line and staff organization C. Matrix organization
B. Divisional organization D. Functional organization
31. A new textile factory in Addis Ababa is being designed. The project leader wants to balance
efficient use of resources with effective project objectives. She decides that project
personnel will report to both a functional manager and the project manager. This creates dual
subordination but allows shared authority. This structure is called:
A. Divisional organization C. Line organization
B. Matrix organization D. Project coordinator model
32. A new pharmaceutical plant in Bishoftu wants to acquire a patented vaccine production
process. The technology supplier will not sell it outright but agrees to let the Ethiopian
company use it under contract. This arrangement is called:
A. Outright purchase of technology C. Joint venture with equity holding
B. Technology licensing D. Turnkey contract
33. A coffee processing plant in Yirgacheffe is choosing machinery. The project team compares
two options: one fully automated from Germany, and one semi‑automated from a local
supplier. The German option has high capital cost but low labor requirement. The local option
fits local skills and is cheaper. The most appropriate choice based on the text would consider
all EXCEPT:
A. Skills necessary to use automated equipment
B. Availability of foreign exchange
C. Raw material availability
D. Maintenance requirements
E. None
34. A new textile factory in Addis Ababa wants to forecast demand for its cotton fabrics over the
next five years. The project manager invites the sales manager, production head, finance
officer, and marketing director to a meeting. Each gives their opinion, and after discussion
they agree on a single sales forecast. This method is called the:
A. Delphi method C. Leading indicator method
B. Trend projection method D. Jury of executive method

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35. A large coffee roasting and packaging plant in Yirgacheffe completes its feasibility study. The
report begins with a two‑page summary that covers the project background, key market
findings, estimated investment cost, projected profitability, and the main recommendation
to proceed. This section is known as the:
A. Executive summary C. Market analysis chapter
B. Technical appendix D. Financial statement
36. A pharmaceutical company in Ethiopia plans to produce generic antibiotics. They must decide
whether to build one large plant in Addis Ababa to serve the entire country, or build two
medium plants one in Addis and one in Dire Dawa to reduce transportation costs. The optimal
choice depends mainly on balancing:
A. Labor cost versus energy cost
B. Import duty versus export incentive
C. Economies of scale Vs economies of distribution
D. Land price versus construction cost
37. A fruit juice concentrate factory is being considered in Arba-Minch. The feasibility team finds
that installing the full designed capacity in one stage would lower the capital cost per unit,
but would leave a large portion of the plant idle for the first two years. Installing capacity in
two phases would avoid idle capacity but increase total capital cost. This decision is about:
A. Scale of operations and time phasing
B. Product quality standards
C. Choice of production technology
D. Location of the plant
38. A sugar factory expansion project in Wonji forecasts a 15% annual increase in sugar prices and
assumes construction will take only 18 months. In reality, prices stagnate and construction
takes 30 months, causing massive cost overruns. The project becomes unprofitable and
requires government bailouts. These errors are classic examples of:
A. Effective risk management
B. Underestimating returns and Overestimating costs
C. Proper use of demand forecasting techniques
D. Successful project identification
E. Overestimating returns and underestimating costs

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39. A plastics manufacturing company wants to estimate future demand for polypropylene
packaging in Ethiopia. They calculate how many kilograms of plastic are required per unit of
cement bag, per unit of bottled water, and per unit of textile roll. Then they multiply these
coefficients by the projected output of cement, bottled water, and textiles. This forecasting
method is called the:
A. Chain ratio method
B. End‑use method (consumption coefficient method)
C. Moving average method
D. Exponential smoothing method
40. A new bottled water factory is being planned near the town of Sululta. The project team must
choose between two broad areas Sululta town itself or the neighboring Sebeta area. After
that, they will pick a specific plot of land. The broad area is called the _____, and the specific
plot is called the _____.
A. Site / location
B. Location / site
C. Zone / plot
D. Region / address
Part II Based on the feasibility study you conducted in your group; Provide Short and Precise
answer for the following Questions
41. What is the name of your Project_________________________________________?
42. List the main Products of your project_________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
____________________
43. Who are the main customers of your product__________________________________________
___________________________________________________________________________________
___________________________
44. Where is your project location_____________________________
45. Is your project Feasible? What is the amount of the total inicial
investment______________NPV__________, IRR ___________and Payback Period___________

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