JHU has recently completed an eight year project. The project was evaluated at a discount rate of 10% and was accepted because the net present value was $18 million.
In year 3 of the project there was a significant unexpected repair arising because of the implementation stage of the project was rushed and some checks on equipment were skipped to save time. The cost of this was $8 million.
In year 8 of the project the costs of dismantling the project were $11 million more than anticipated because of unexpected changes to the law concerning disposal of industrial scrap.
How should these findings be reflected in the post completion audit?

• A. Poor project management cost the entity $16 million, to the nearest million.
• B. Poor project management cost the entity $6 million, to the nearest million.
• C. Poor project management cost the entity $11 million, to the nearest million.
• D. Poor project management cost the entity $5 million, to the nearest million.

Systems Development Lifecycle (SDLC) is used to manage risk within the development of new computer systems.
Which THREE of the following are appropriate controls to manage risk within the SDLC Process?

• A. When developing the new system, the developers must follow defined programming standards and carry out component test to specified test harness outputs.
• B. The Post Completion Review should take place immediately after the implementation while all the facts are still fresh in everyone's minds.
• C. When planning the new system, a clear business case must be approved specifying functionality, data transformation, expected costs and benefits.
• D. When designing the new system, controls must be put in place to ensure that all the functionalities of the old system are replicated.
• E. When the implementation of the new system is taking place, parallel running must be undertaken to ensure the output for the new system exactly matches that from the old system.
• F. When doing the analysis for the new system particular care should be taken over the data specification, transformation and manipulation, ensuring that expected outputs are defined and that such output meets the needs and expectations of the business users.

P Ltd, a manufacturing company, is considering a new capital investment project to set up a new production line. The initial appraisal shows a healthy net present value of $6,465 million at a discount rate of 10% as shown in the table below:
However, management is unsure about the demand for the product which will be produced and has insisted that the future revenues should be reduced to certainity equivalents by taking 70%, 65% and 60% of the years 1,2, and 3 cash inflows respectively.
What should P do?

• A. Re-appraise the project using other capital appraisal techniques to get a more balanced view.
• B. Proceed with the project, it has a healthy net present value.
• C. Stop the project, it has considerable risk.
• D. Put pressure on sales and marketing to re-verify their forecasts.

Which risks should be given the highest priority?

• A. Risks which have a low impact but which arise frequently.
• B. Risks which have a high impact and which may arise occasionally.
• C. Risks which have a low impact and a low likelihood of arising.
• D. Risks which have a high impact and have a low likelihood of arising.