GeES 4016 - Project Appraisal and Financial Analysis Quiz
22 Questions
10 Views

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What do sunk costs refer to?

  • Costs incurred before appraisal and are irrecoverable (correct)
  • Costs related to the operation of a project
  • Costs that vary with the volume of the product
  • Components of pre-operative expenses

    • What does depreciation measure?

  • The loss of value of an asset arising from the passage of time (correct)
  • The cost of materials, labor, and factory overhead
  • The financial requirement needed to finance the current asset of the balance sheet
  • The fees paid to technical consultants and engineers

    • What are direct costs in the context of project operation?

  • Costs that do not vary with the volume of the product
  • Costs directly attributable to the production (correct)
  • Costs that vary with the volume of the product
  • Costs incurred for procuring office equipment

    • What does the cost of production include?

    <p>Raw materials, supplies, and components temporarily held in stock until usage</p> Signup and view all the answers

    What is working capital?

    <p>The financial requirement needed to finance the current asset of the balance sheet</p> Signup and view all the answers

    What are examples of costs irrelevant for project decisions?

    <p>Research and development expenditure or market research costs</p> Signup and view all the answers

    What is the measure of the loss of value of an asset arising from the passage of time?

    <p>$ ext{Depreciation}$</p> Signup and view all the answers

    Which costs are directly attributable to the production?

    <p>$ ext{Direct costs}$</p> Signup and view all the answers

    What does pre-operative expenses include?

    <p>Establishment expenses, rent, travel expenses, interest on borrowings.</p> Signup and view all the answers

    What are miscellaneous fixed assets?

    <p>Costs incurred for procuring office equipment, laboratory equipment, workshop equipment, vehicles, etc.</p> Signup and view all the answers

    What is the purpose of conducting project appraisal?

    <p>To reexamine every aspect of the project and modify the plan if necessary</p> Signup and view all the answers

    What does financial analysis of projects involve?

    <p>Analyzing costs related to project investment and operation</p> Signup and view all the answers

    What does 'The Costs of a Project' refer to?

    <p>Total outlay of all items associated with a project</p> Signup and view all the answers

    What does 'Land and Site Development' costs include?

    <p>Costs incurred for preparing the land for use</p> Signup and view all the answers

    Which component is considered the most significant in project cost?

    <p>Plant and machinery</p> Signup and view all the answers

    What is the focus of environmental analysis in financial project appraisal?

    <p>Analyzing the environmental impact of the project</p> Signup and view all the answers

    What is the purpose of conducting project appraisal?

    <p>To reexamine every aspect of the project</p> Signup and view all the answers

    What type of information is collected during financial analysis of projects?

    <p>Both revenue (benefit) and cost information</p> Signup and view all the answers

    What does the total costs of a project include?

    <p>The total outlay of all items associated with a project</p> Signup and view all the answers

    Which component of a project's cost is considered the most significant?

    <p>Cost of plant and machinery</p> Signup and view all the answers

    What is included in the costs relevant to the initial investment of a project?

    <p>Estimation of costs related to investment and operational costs</p> Signup and view all the answers

    What is the benefit of conducting appraisal during project planning?

    <p>To uncover unnoticed factors at the detailed planning stage</p> Signup and view all the answers

    Use Quizgecko on...
    Browser
    Open
    Browser
    Browser