UNIVERSITY OF BOLTON ENGINEERING, SPORTS AND SCIENCES. BSc(HONS) CIVIL ENGINEERING SEMESTER ONE EXAMINATION 2014/2015 SEMESTER ONE

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1 For Faculty Use UNIVERSITY OF BOLTON ENGINEERING, SPORTS AND SCIENCES BSc(HONS) CIVIL ENGINEERING SEMESTER ONE EXAMINATION 2014/2015 SEMESTER ONE PROJECT AND ENVIRONMENTAL MANAGEMENT MODULE NO: BLT3026 Date: Tuesday 20 January 2015 Time: am noon INSTRUCTIONS TO CANDIDATES: There are FOUR questions. Answer ANY THREE questions. All questions carry equal marks. Annuity tables are attached This examination paper carries a total of 75 marks

2 Engineering, Sport and Sciences BSc(Hons) in Civil Engineering Semester One Examination 2014/2015 Project Management Module No. BLT3026 Page 2 of 5 Q1.a Within the context of civil engineering define what is meant by a project and schematically show its main lifecycles. (5 marks) Q1.b Discuss the role of a Construction Project Manager from inception of the project through to final project completion and handover. Ensure to include in your discussion the traits the manager needs to have to succeed in his/her role. Q1.c Explain how the PFI contract process works and discuss its main benefits and drawbacks. Q2.a Discuss the importance of investment appraisal for projects and explain the difference between discounted and non-discounted cashflow techniques used. (5 marks) Q2.b A civil engineering company decided to diversify its construction activities to improve prospect of winning works in drainage and earthwork areas. It considers investing heavily in new equipment and machinery to meet the expected work. The board of directors considers two projects for investment: The first project requires an investment of 1,000,000 now. In return, the company is expected to receive six annual payments of 210,000, the first of which will be done one year after the investment. The second project also requires an investment of 1,000,000 now, but it requires a further investment of 250,000 one year later. In return, the company is expected to receive 850,000 in four years' time and another 850,000 in seven years' time. Appraise the two investments using: (i) The Payback method (ii) The Net Present Value method, if the cost of investment is 4%. Explain the reasons for your advice to the company? (20 marks) Please turn the page

3 Engineering, Sport and Sciences BSc(Hons) in Civil Engineering Semester One Examination 2014/2015 Project Management Module No. BLT3026 Page 3 of 5 Q3.a Define the concept of value management in projects and explain the need for its implementation and the benefits it can bring to projects. Q3.b Describe the phases of value management process in a project and explain the roles of the facilitator (5 marks) Q3.c Critically discuss the challenges which could be faced when applying value management process in the construction industry. Q.4 A contractor is preparing to bid for a contract with one of the utilities company. The contract is expected to run for a period of year with a possibility of extension to 4, 5 or 6 years. The bid will involve an initial capital outlay of 320,000 for the purchase of specialist equipment. A risk analysis shows that the annual profit for the contract could be 85,000, 100,000 or 115,000 with respective probabilities of 0.3, 0.5 and 0.2. It also indicates that the profit could vary with contract duration in accordance with the probabilities set out in Table Q4 below. Annual Profit Project life 85, , ,000 4 years years years Table Q4 The salvage value of the specialist equipment is estimated as being 25,000, 15,000 and 10,000 after 4, 5 and 6 years respectively. The contractor requires a minimum return of 10% on all investments. Assemble the data necessary for the plotting of an investment risk profile and evaluate the conclusions you would reach based upon this data. (25 marks) END OF QUESTIONS

4 Table A-1 Future Value Interest Factors for One Pound Compounded at k Percent for n Years: FVIF k,n = (1 + k) n * * * * * * * * * * * * * * * * *

5 Table A-2 Future Value Interest Factors for a One Pound Annuity Compounded at k Percent for n Years: FVIFA k,n = [(1 + k) n - 1 ] / k * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *

6 Table A-3 Present Value Interest Factors for One Pound Discounted at k Percent for n Years: PVIF k,n = 1 / (1 + k) n * * * * * * * * * * * * *

7 Table A-4 Present Value Interest Factors for a One Pound Annuity Discounted at k Percent for n Years: PVIFA = [1-1/(1 + k) n ] / k