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A project consists of the following activities Activity Preceding activity Duration (days) A - 9 B - 10 C B 4 D A 10 E

  1. A project consists of the following activities

Activity

Preceding activity

Duration (days)

A

-

9

B

-

10

C

B

4

D

A

10

E

A

5

F

A

9

G

E

7

H

D

8

I

C,F

7

J

G,H,I

8

Required


  1. Draw a network diagram for the project 
  2. Determine the activities of the critical path 
  3. Determine the normal project duration 

2.

  1. A community intends to invest in either project A or B. The initial investment outlay for the project is Ksh.1, 000,000. The following are the expected cash flows of each project.

Cash inflows (Ksh.)

Year

Project A

PROJECT B

1

200,000

300,000

2

450,000

600,000

3

350,000

200,000

4

200,000

200,000

                     The cost of capital is 12%

Required: 

  1. Determine the Net Present Value (NPV) of each project.

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