Question

Which of the following statement(s) is/are true?

A. Technical feasibility is not required in case of hospital projects. B. Pattern of financing is ignored while computing cost of capital. C. CPM is superior to PERT in some situations. D. Infrastructure projects are ideally financed through long term sources. E. Cost of internally generated funds is zero.

Choose the correct answer from the options given below:

Accepted Answer

D. - Statement C is true: Critical Path Method (CPM) is superior for deterministic, well-defined projects (like construction), whereas PERT is suited for probabilistic R&D projects. - Statement D is true: Infrastructure projects require heavy capital expenditure with long gestation periods, so long-term financing is ideal. - Statement A is false (technical feasibility is mandatory for hospital projects). - Statement B is false (capital structure impacts overall cost of capital). - Statement E is false (internally generated funds have an opportunity cost). Thus, C and D only are correct.

Project Management and Finance Statements

Explanation

Practise this under exam conditions