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# NOTTINGHAM TRENT UNIVERSITY

## SCHOOL OF SCIENCE AND TECHNOLOGY

ISYS40091: ENTREPRENEURIAL LEADERSHIP AND PROJECT MANAGEMENT
Date: Friday, 9 December 2011
14:20 15:50 (class test)
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INSTRUCTIONS TO CANDIDATES:
The paper has two sections
Section A -

Section B -

## Calculators may be used.

For this examination you are supplied with the following:

(attached)

## Table: Net Present Value Discount Factors (attached)

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## ISYS40091: Entrepreneurial Leadership & Project Management

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December 2011

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## Section A: Attempt TWO questions,

totalling no more than 20 marks
Q1 Two project proposals have been presented for you to consider as
the project manager. The estimated cash flows for the individual
projects are listed in column two and column three of Table Q1. Also
shown on the table are the corresponding cash flows after
adjustment for an average annual discount factor (interest rate) of
10%.

Year

## Original cash flows

for 10% discount factor

Project A

Project B

Project A

Project B

(15000)

(15000)

(15000)

(15000)

8000

625

7273

568

6000

865

4958

715

3000

1550

2254

1165

1600

4000

1093

2732

900

6000

559

3725

500

6960

282

3929

Table Q1

a)

Calculate the simple payback period to the nearest month for each of
the two projects.

b)

Determine the Net Present Value (NPV) for each of the two projects.

c)

Based on the results obtained in parts (a) and (b) above, suggest
which project should be given the go ahead. Three reasons,
including a discussion on the pattern of cash flows, should be
given in support of the decision.

(10 marks)

## ISYS40091: Entrepreneurial Leadership & Project Management

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December 2011

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Q2

## An IT project has a series of related activities as detailed in Table Q2. The

estimated duration and standard deviation associated with the individual
activities were obtained by using brainstorming technique.

Activity

Estimated duration
(days)

Standard deviation
(days)

Specify overall

Specify module A

10

Specify module B

0.5

Specify module C

15

Check specification
(for all modules)

0.01

Design module A

1.5

Design module B

Design module C

0.5

Test module A

20

Test module B

18

Test module C

System integration
(of all modules)

Table Q2
a)

## Using the blank network diagram provided on page 9, compute the

early and late activity times, and the slack time for the individual
activities. Hence, state the expected duration of the project. All
blocks must be properly labelled.
Remember to attach the completed worksheet to the answer
book.

b)

## Explain briefly how the availability of slack may be used to improve

the utilisation of resources in the context of project planning. Illustrate
(10 marks)

## ISYS40091: Entrepreneurial Leadership & Project Management

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December 2011

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Q3

## Figure Q3 shows the arrangement of a group of activities associated

with a new project. The symbols have their usual meanings.

Te = 3
SD=0.83

Te = 7
SD=0.07

Te = 10
SD=0.59

Te = 9
SD=0.7

Te = 7
SD=0.39

Te = 4
SD=0.6

Te = 5
SD=0.4

G
Te = 14
SD=0.85
Figure Q3

a)

With reference to Figure Q3, identify and write down all possible
paths. For the critical path only, determine the overall path
expected duration and path standard deviation.

b)

By considering the critical path only, determine the probability that the
project will complete under each of the following conditions:
(i)
(ii)

c)

## One week ahead of schedule

One week after the expiry of the project deadline

## Determine the probability that activity F can start at the beginning of

week 15.
All working must be shown.
(10 marks)

## ISYS40091: Entrepreneurial Leadership & Project Management

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December 2011

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Q4

## Figure Q4 shows the organisation of a project in the form of a precedence

diagram, with the following additional information available for each
activity:

## Minimum required activity duration in days

Te = 10
300/day

Te = 23
160/day

Te = 14
100/day

Min 8 days

Min 22 days

Min 12 days

Te = 21
140/day

Te = 15
180/wk

Te = 5
550/day

Min 18 days

Min 13 days

Min 4 days

Te = 29
60/day

Te = 43
80/day

Min 29 days

Min 43 days

Figure Q4
By considering the constituent activities of the five possible paths of the
precedence diagram (Figure Q4), determine the sequence of activities that
you would crash as you attempt to reduce the project duration by four
days at minimum cost.
You may wish to use a table to demonstrate the sequence of the crashing
process, which should be done in one-day periods, taking account of the
appropriate constraints. An explanation of your approach must be
provided at each stage of the crashing process.
State the total cost involved at the completion of the crashing process and
comment briefly on the growth of the cumulative cost when attempting to
crash the project.
(10 marks)

## ISYS40091: Entrepreneurial Leadership & Project Management

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December 2011

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## Section B: Attempt ONE question,

totalling no more than 10 Marks

Q5

## A company intends to form a new project team to facilitate the

development, promotion and support of new technical services to existing
clients. As the project manager designate, you have been asked to
assemble a project team.
a)

## Discuss why a matrix-based team formation is preferred to a

functional-based team formation when undertaking the new project.
(5 marks)

b)

Q6

## Discuss the 5-stage team development process according to Tuckman

and Benson.
(5 marks)

After attending the first meeting as the new project manager in charge of
facility maintenance, you left with the impression that maintenance staff
lacked motivation and showed little commitment to their work, as is
evident from relatively poor feedback from clients.
Discuss, by considering Maslows hierarchy of needs, what steps you would
take to increase the team's motivation and make them more proactive in
their approach to tackling maintenance-related issues.
(10 marks)

Q7

## A technology company has decided to examine the issues relating to risk

management in the context of undertaking new projects. This will be the
first time that the company has set up a project risk team to be led by you
as the project manager. It is hoped that your risk team will develop a
process that can be used on all future projects.
As the project manager, you have been asked to prepare briefing notes for
the first team meeting. The notes should outline how you envisage the
team should proceed in handling project risks.
Discuss, by considering the 7-stage risk management cycle, the likely
contents of the project managers briefing notes with respect to the
planning process for handling risk events.
(10 marks)
End of Paper

## ISYS40091: Entrepreneurial Leadership & Project Management

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December 2011

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x
Areas in the tail of the Normal Distribution, Z to + , where Z

0.00

0.01

0.02

0.03

0.04

0.05

0.06

0.07

0.08

0.09

0.0

0.5000

0.4960

0.4920

0.4880

0.4840

0.4801

0.4761

0.4721

0.4681

0.4641

0.1

0.4602

0.4562

0.4522

0.4483

0.4443

0.4404

0.4364

0.4325

0.4286

0.4247

0.2

0.4207

0.4168

0.4129

0.4090

0.4052

0.4013

0.3974

0.3936

0.3897

0.3859

0.3

0.3821

0.3783

0.3745

0.3707

0.3669

0.3632

0.3594

0.3557

0.3520

0.3483

0.4

0.3446

0.3409

0.3372

0.3336

0.3300

0.3264

0.3228

0.3192

0.3156

0.3121

0.5

0.3085

0.3050

0.3015

0.2981

0.2946

0.2912

0.2877

0.2843

0.2810

0.2776

0.6

0.2743

0.2709

0.2676

0.2643

0.2611

0.2578

0.2546

0.2514

0.2483

0.2451

0.7

0.2420

0.2389

0.2358

0.2327

0.2296

0.2266

0.2236

0.2206

0.2177

0.2148

0.8

0.2119

0.2090

0.2061

0.2033

0.2005

0.1977

0.1949

0.1922

0.1894

0.1867

0.9

0.1841

0.1814

0.1788

0.1762

0.1736

0.1711

0.1685

0.1660

0.1635

0.1611

1.0

0.1587

0.1562

0.1539

0.1515

0.1492

0.1469

0.1446

0.1423

0.1401

0.1379

1.1

0.1357

0.1335

0.1314

0.1292

0.1271

0.1251

0.1230

0.1210

0.1190

0.1170

1.2

0.1151

0.1131

0.1112

0.1093

0.1075

0.1056

0.1038

0.1020

0.1003

0.0985

1.3

0.0968

0.0951

0.0934

0.0918

0.0901

0.0885

0.0869

0.0853

0.0838

0.0823

1.4

0.0808

0.0793

0.0778

0.0764

0.0749

0.0735

0.0721

0.0708

0.0694

0.0681

1.5

0.0668

0.0655

0.0643

0.0630

0.0618

0.0606

0.0594

0.0582

0.0571

0.0559

1.6

0.0548

0.0537

0.0526

0.0516

0.0505

0.0495

0.0485

0.0475

0.0465

0.0455

1.7

0.0446

0.0436

0.0427

0.0418

0.0409

0.0401

0.0392

0.0384

0.0375

0.0367

1.8

0.0359

0.0351

0.0344

0.0336

0.0329

0.0322

0.0314

0.0307

0.0301

0.0294

1.9

0.0287

0.0281

0.0274

0.0268

0.0262

0.0256

0.0250

0.0244

0.0239

0.0233

2.0

0.0228

0.0222

0.0217

0.0212

0.0207

0.0202

0.0197

0.0192

0.0188

0.0183

2.1

0.0179

0.0174

0.0170

0.0166

0.0162

0.0158

0.0154

0.0150

0.0146

0.0143

2.2

0.0139

0.0136

0.0132

0.0129

0.0125

0.0122

0.0119

0.0116

0.0113

0.0110

2.3

0.0107

0.0104

0.0102

0.0099

0.0096

0.0094

0.0091

0.0089

0.0087

0.0084

2.4

0.0082

0.0080

0.0078

0.0075

0.0073

0.0071

0.0069

0.0068

0.0066

0.0064

2.5

0.0062

0.0060

0.0059

0.0057

0.0055

0.0054

0.0052

0.0051

0.0049

0.0048

2.6

0.0047

0.0045

0.0044

0.0043

0.0041

0.0040

0.0039

0.0038

0.0037

0.0036

2.7

0.0035

0.0034

0.0033

0.0032

0.0031

0.0030

0.0029

0.0028

0.0027

0.0026

2.8

0.0026

0.0025

0.0024

0.0023

0.0023

0.0022

0.0021

0.0021

0.0020

0.0019

2.9

0.0019

0.0018

0.0018

0.0017

0.0016

0.0016

0.0015

0.0015

0.0014

0.0014

3.0

0.0013

0.0013

0.0013

0.0012

0.0012

0.0011

0.0011

0.0011

0.0010

0.0010

## ISYS40091: Entrepreneurial Leadership & Project Management

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## Tables of Net Present Value discount factors

Discount rate (%)
1

Years

10

0.9901 0.9804 0.9709 0.9615 0.9524 0.9434 0.9346 0.9259 0.9174 0.9091

0.9803 0.9612 0.9426 0.9246 0.9070 0.8900 0.8734 0.8573 0.8417 0.8264

0.9706 0.9423 0.9151 0.8890 0.8638 0.8396 0.8163 0.7938 0.7722 0.7513

0.9610 0.9238 0.8885 0.8548 0.8227 0.7921 0.7629 0.7350 0.7084 0.6830

0.9515 0.9057 0.8626 0.8219 0.7835 0.7473 0.7130 0.6806 0.6499 0.6209

0.9420 0.8880 0.8375 0.7903 0.7462 0.7050 0.6663 0.6302 0.5963 0.5645

0.9327 0.8706 0.8131 0.7599 0.7107 0.6651 0.6227 0.5835 0.5470 0.5132

0.9235 0.8535 0.7894 0.7307 0.6768 0.6274 0.5820 0.5403 0.5019 0.4665

0.9143 0.8368 0.7664 0.7026 0.6446 0.5919 0.5439 0.5002 0.4604 0.4241

10 0.9053 0.8203 0.7441 0.6756 0.6139 0.5584 0.5083 0.4632 0.4224 0.3855

## Discount rate (%)

11

Years

12

13

14

15

16

17

18

19

20

0.9009 0.8929 0.8850 0.8772 0.8696 0.8621 0.8547 0.8475 0.8403 0.8333

0.8116 0.7972 0.7831 0.7695 0.7561 0.7432 0.7305 0.7182 0.7062 0.6944

0.7312 0.7118 0.6931 0.6750 0.6575 0.6407 0.6244 0.6086 0.5934 0.5787

0.6587 0.6355 0.6133 0.5921 0.5718 0.5523 0.5337 0.5158 0.4987 0.4823

0.5935 0.5674 0.5428 0.5194 0.4972 0.4761 0.4561 0.4371 0.4190 0.4019

0.5346 0.5066 0.4803 0.4556 0.4323 0.4104 0.3898 0.3704 0.3521 0.3349

0.4817 0.4523 0.4251 0.3996 0.3759 0.3538 0.3332 0.3139 0.2959 0.2791

0.4339 0.4039 0.3762 0.3506 0.3269 0.3050 0.2848 0.2660 0.2487 0.2326

0.3909 0.3606 0.3329 0.3075 0.2843 0.2630 0.2434 0.2255 0.2090 0.1938

10 0.3522 0.3220 0.2946 0.2697 0.2472 0.2267 0.2080 0.1911 0.1756 0.1615

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