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SEPTEMBER SEMESTER 201 1 FINAL EXAMINATION
GOURSE CODE DATE

PROJECT COST ANALYSIS & APPRAISAL

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B. Read the

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

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PART A
INSTRUCTIONS: 2.

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1. THERE ARE Two (2) ouESTroNS rN THls PART. t. TWO OUESTTONS tN THrS

1 -*-4n ANSWER BorH euESroNS. ,)**"[#* * ',*%r*{* ':X:/^*r':' ry'"/|:",fr,

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euestion

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Discuss THREE (3) reasons why it becomes particularly difficult to do

(CBA) for Government projects? Support your answers with appropriate illustrations and examples.

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Auestionz

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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

Many times in a cost-benefit study there will be changes in quantities for which there is no market' 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 infer valuations 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 to follow subjects for a long duration.
Discuss the relevance of preschool education projects to this approach of human investment evaluation.

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support your answers with appropriate iilustrations and exampres.

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IOTAL: 20 MARKS]

,/ ,Ftestion

Experience with projects over time has indicated that the long-term success of development projects and the sustainability of project benefits depend on a number of project quality factors, 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

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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 the society which cannot be reflected at the level of financial analysis. Such external effects
should be dealt with in the economic analysis.
Explain TWO (2)

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an economic analysis.

ForAL: 20 MARKSI -..n-g # u ^,-l*' -lLJ *04 1 s.'dr ^,o.o3 '-) Questions e_dzkro^nr.< -trn+.u 4ai3 4 "-*t h tJ
ln performing an economic feasibility studfof a highway project, social benefits and costs,
both tangible and intangible, should be

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identified.

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project.

Discuss oNE (1) intangible social benefit and oNE

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intangible social cost of a highway

support your answers with appropriate iilustrations.and exampres.

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IOTAL: 20 MARKSI

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PAPER ENDS HERE

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