ICAR AICE-JRF/SRF (PhD admission and fellowship) · India · National Testing Agency for ICAR
Original practice questions written to the published syllabus · not past papersTaking an agricultural project from idea to appraisal to delivery, and building an agri-enterprise: feasibility, NPV and IRR, PERT/CPM, business plans and incubation.
In the exams: agribusiness management PhD entrance and fellowship examinations, project management and entrepreneurship (heavy); agricultural economics PhD entrance and fellowship examinations, project appraisal (heavy); agricultural master's entrance examinations, time value of money and entrepreneurship (heavy); agricultural development bank officer recruitment, project appraisal (present)
How our questions for ICAR AICE-JRF/SRF spread across the units of Project Management, Appraisal & Agri-Entrepreneurship. Difficulty: 11 easy, 47 medium, 31 hard.
| CPM and PERT | 10 | |
| Discounted measures: NPV, IRR, BCR and profitability index | 9 | |
| Social cost-benefit analysis | 9 | |
| Theories of entrepreneurship and entrepreneurial competencies | 8 | |
| Incubation, IPR and technology commercialisation | 8 | |
| Project risk | 7 | |
| Cost overruns, monitoring and mid-course correction | 7 | |
| Scheduling and resource allocation | 6 | |
| Financial and economic feasibility | 5 | |
| Undiscounted measures: payback and ARR | 4 | |
| The project cycle | 4 | |
| Market and technical feasibility | 4 | |
| Time value of money: compounding and discounting | 2 | |
| Setting up a micro, small or medium enterprise | 2 | |
| Business plans | 2 | |
| Women's, self-help group and family enterprises | 2 |
Choose an answer, then open the working. Each explanation says why the right answer is right and why the others are not.
The nominal discount rate is 12% and expected inflation is 5%. What is the exact real discount rate?
C. 6.67%
Fisher relation: real = (1 + nominal)/(1 + inflation) − 1 = 1.12/1.05 − 1 = 6.67%. 7.00% is the simple-subtraction approximation; 17.60% multiplies the two factors instead of dividing; 5% is the inflation rate itself. Real cash flows must be discounted at the real rate.
Further reading: Brealey, Myers and Allen, Principles of Corporate Finance
Two mutually exclusive projects cost 1,000 currency units each. A returns 1,500 currency units in year 3 only (IRR 14.5%). B returns 950 currency units, 150 and 100 in years 1-3 (IRR 15.5%). The opportunity cost of capital is 10%. Which should be chosen and why?
D. A, because its NPV at 10% (about 127) exceeds B's (about 63)
For mutually exclusive projects rank by NPV at the opportunity cost of capital (or by the IRR of the incremental flows). NPV(A) = 1,500 × 0.7513 − 1,000 = 127; NPV(B) = 63. The NPV curves cross at about 13.8% (the Fisher rate); below that A is better. Ranking by IRR is the classic error because IRR ignores scale and timing differences.
Further reading: Gittinger, Economic Analysis of Agricultural Projects (1982)
Which probability distribution does PERT assume for the duration of an individual activity?
B. Beta distribution
The three-point estimate te = (a + 4m + b)/6 derives from the beta distribution, which is bounded and can be skewed. The normal distribution is applied to the total project duration through the central limit theorem, not to each activity.
Further reading: Taha, Operations Research: An Introduction
Which statement correctly contrasts CPM and PERT?
B. CPM uses single, known activity times; PERT uses three time estimates to handle uncertainty
CPM, developed for plant construction and maintenance with DuPont, assumes deterministic times and adds time-cost trade-offs; PERT, developed for the US Navy's Polaris programme, treats durations as random. Both model precedence.
Further reading: Taha, Operations Research: An Introduction
Which of these is NOT one of the six aspects of project preparation listed by Gittinger?
C. Political
Gittinger's six aspects are technical; institutional-organisational-managerial; social; commercial; financial; and economic. Political considerations matter in practice but are not one of his analytical aspects.
Further reading: Gittinger, Economic Analysis of Agricultural Projects (1982)
In a logical framework matrix, what are the four columns?
C. Narrative summary, objectively verifiable indicators, means of verification, assumptions
Goal, purpose, outputs and activities are the rows (the hierarchy of objectives). The columns describe each level, how its achievement will be measured, where the evidence comes from, and what external conditions must hold.
Further reading: USAID logical framework; Gittinger (1982)
A potato cold store is sized to hold the full peak harvest of its catchment. What must its technical and financial projections show that a simple 'rated capacity' figure hides?
D. Year-wise and season-wise capacity use, since the store will be partly empty much of the year
Revenue depends on space actually rented over the storage season, not on rated capacity. Projections assuming full utilisation overstate income; the study should show the expected fill rate for each year and season, based on catchment supply and competing stores.
Further reading: Gittinger, Economic Analysis of Agricultural Projects (1982)
Gittinger warns about a common error in the technical coefficients of agricultural projects. What is it?
C. Assuming research-station yields and rapid adoption rather than realistic on-farm results
Many failed projects rested on yields that farmers never achieved and on adoption schedules that were too fast. Coefficients should come from on-farm evidence with a realistic build-up. Physical contingencies and with-and-without comparisons are good practice.
Further reading: Gittinger, Economic Analysis of Agricultural Projects (1982)
Which of the following is NOT one of Schumpeter's five types of 'new combinations'?
D. Reducing wages to lower production cost
The five are: a new good or quality; a new method of production; a new market; a new source of raw material or half-manufactured goods; and a new organisation of an industry (creating or breaking a monopoly). Cutting wages is not innovation.
Further reading: Schumpeter, The Theory of Economic Development
In Clarence Danhof's classification of entrepreneurs, a farmer who adopts a new practice only when failing to do so would clearly cause a loss is called:
B. Fabian
Danhof, studying American agriculture, identified innovative (introduce new ideas), imitative or adoptive (copy successful innovations), Fabian (very cautious, change only when forced by threat of loss) and drone (refuse to change even at a loss).
Further reading: Danhof (1949), as summarised in standard entrepreneurship texts
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