Assig - Candidate Written - Manage Project Financing

KAMUKUNJI TECHNICAL AND VOCATIONAL COLLEGE
P.O.BOX 1626-00600 NAIROBI

MOBILE NUMBER: 0110 099 913
Email: [email protected]
Qualification Code : 041306T4

Qualification : PROJECT MANAGER LEVEL 6
Unit Code : BUS/OS/PM/CR/05/6/A
Unit of Competency : MANAGE PROJECT FINANCING
Date : 12/03/2024
WRITTEN ASSESSMENT
INSTRUCTIONS TO CANDIDATES
1. This paper has two sections A and B.
2. You are provided with a separate answer booklet.
3. Marks for each question are as indicated.
4. Do not write on the question paper.
SECTION A: (40 Marks)
Answer all questions in this section.
1. Outline the process of analyzing data for financial risk identification and mitigation.
(5 Marks)
2. State FIVE characteristic of an effective financial risk mitigation plan in project management.
(5 Marks)
3. In relation to project financing, explain the term ‘project risk financing model (PFM)’.
(2 Marks)
4. List THREE risk mitigation responses carried out according to the Enterprise Risk
Management (ERM) policy (3 Marks)
5. State FIVE types of project finance risk data. (5 Marks)
6. Explain the meaning of the term recruitment process in relation to project financial risk
management. (2 Marks)
7. State FIVE ways of identifying risks in project finance scenarios. (5 Marks)
8. Highlight FOUR elements of a good financial risk internal control system. (4 Marks)
9. State FOUR roles played by effective risk monitoring and evaluation plans. (4 Marks)
10. List FIVE roles of project risk management organization structure. (5 Marks)
SECTION B (60 MARKS)
Answer question 11 (compulsory) and any other two questions in this section.
11. Read the case study below and use it to answer questions a and b
SUZIEBEAUTY LIMITED
Suzie Beauty Limited, offers make-up services to a range of clients. It developed a product
linebranded SB, an abbreviation of Suzie Beauty. Most of the quality products available in the
market are unaffordable to most Kenyans. SB wanted to develop a product line that offers quality
at an affordable price.
The SB product line comprises of a full range of make-up (foundations, powders, concealers, eye
shadow, eye liner, mascara, blush, lipstick, lip gloss, lip liner), skin care products (moisturizers,
eye cream, eye make-up remover, lip moisture), and application brushes. SB has been using the
SB product line in all make-up services contracts over the past year. The intention was to try it out
on clients and get their feedback to help improve on the products. The company is so far confident
that the product is of good quality based on the feedback of its clients.
The beauty market in Kenya, which is estimated to be worth over Ksh.15 billion ($185 million),
is flooded with mostly foreign products. Research shows that the development of products to fill
specific market needs has the potential of becoming a big and profitable business. The beauty
industry is highly untapped considering the lengths people would go to buy beauty products. There
are women who would forego buying groceries for their families just to buy a lipstick. Beauty is
one of the industries that were not affected by the recession.
In a few months the SB product line will be available for sale at selected beauty stores. Products
will retail for between Ksh.600 (US$7.4) and Ksh.2,500 ($30.8). This is a capital-intensive project.
To start a product line in Kenya one would need at least Ksh.20 million ($246,000). The company
have to assemble all the raw materials abroad and use the chemists there for testing and formulation
of the products after which it imports the ready-made products. It would be very expensive to
manufacture from Kenya since SB do not have most of the essential facilities and equipment here.
SB would like to partner with other investors in establishing a cosmetics manufacturing plant in
Kenya. This would cost around $2 million. Such a plant would create jobs for hundreds of Kenya’s
youths. In the next three years SB hopes to expand the product line to other countries in the East
Africa region and later to the whole of Africa. The Marketing managers dream is to turn Suzie
Beauty Limited into a household name for everything beauty on the continent, and internationally.
(a) Suzie Beauty is considering to establish a cosmetic manufacturing in Kenya. Using SWOT
tool, analyze the viability of this investment. (8 Marks)
(b) Explain SIX ways that Suzie Beauty Ltd can use to minimize business risks. (12 Marks)
12. Achellis limited a detergent manufacturing firm has hired you as a project financial risk
manager.
(a) Explain FIVE risk control techniques you would employ for reducing the frequency or
severity of losses. (10 Marks)
(b) One of the steps in project risk management process is identifying loss exposure. Explain
FIVE sources of information that a risk manager can use to identify this loss exposure.
(10 Marks)
13. You have been tasked to prepare a proposal on strategies that would help a project business to
avoid business interruption.
(a) Explain FIVE strategies that you would include in the proposal. (10 Marks)
(b) Commercial risk is the risk a company takes by offering credit with no collateral. Explain
FIVE types of commercial risks faced by business projects. (10 Marks)
14. (a) Describe the process of project risk impact evaluation. (10 Marks)
(b) Highlight FIVE ways in which the local community may contribute towards the financing
of a project. (10 Marks)
END

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KAMUKUNJI TECHNICAL AND VOCATIONAL COLLEGE

P.O.BOX 1626-00600 NAIROBI

Qualification Code : 041306T4

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