BA BA Business Case Development 2 — Questions and Answers
Question 1: Which metric measures how long it takes for an investment to pay for itself through savings or revenue?
- Net Present Value (NPV)
- Internal Rate of Return (IRR)
- Payback period (Correct answer)
- Benefit realization rate
Correct answer: Payback period
The payback period calculates the time required for the cumulative benefits of an investment to equal its initial cost.
Question 2: Who typically approves a business case before a project proceeds?
- The lead business analyst
- The project sponsor or senior decision-making authority (Correct answer)
- The development team lead
- The end users
Correct answer: The project sponsor or senior decision-making authority
The project sponsor or a governance body with authority over resources and strategic decisions typically reviews and approves the business case.
Question 3: What is the role of assumptions in a business case?
- To guarantee project success
- To document conditions believed to be true that could affect outcomes if proven false (Correct answer)
- To replace missing requirements
- To assign accountability for deliverables
Correct answer: To document conditions believed to be true that could affect outcomes if proven false
Assumptions document conditions accepted as true for planning purposes; if they prove incorrect, they become risks that could affect the business case projections.
Question 4: A BA is preparing a business case for automating a manual invoicing process. Which benefit category does 'reduced processing time' fall under?
- Strategic benefit
- Intangible benefit
- Tangible/quantifiable benefit (Correct answer)
- Regulatory benefit
Correct answer: Tangible/quantifiable benefit
Reduced processing time is a tangible, measurable benefit because it can be quantified in hours saved and directly converted to cost savings.
Question 5: What is 'sensitivity analysis' used for in a business case?
- To assess stakeholder emotions about the project
- To test how changes in key assumptions affect the projected outcomes (Correct answer)
- To document system security requirements
- To evaluate team performance
Correct answer: To test how changes in key assumptions affect the projected outcomes
Sensitivity analysis tests how the business case projections change when key assumptions (like cost estimates or benefit timelines) vary, revealing how robust the case is.
Question 6: Which of the following best describes an 'intangible benefit' in a business case?
- A benefit with a precise dollar value
- A benefit that is real but difficult to quantify financially, such as improved employee morale (Correct answer)
- A benefit that will never be realized
- A benefit that only applies to external customers
Correct answer: A benefit that is real but difficult to quantify financially, such as improved employee morale
Intangible benefits are real and valuable but cannot easily be expressed in precise monetary terms, such as improved brand reputation or employee satisfaction.
BA BA Business Case Development 2
Which metric measures how long it takes for an investment to pay for itself through savings or revenue?