Business Case Writing Business Case Writing 3 â Questions and Answers
Question 1: When presenting multiple solution options in a business case, what should each option include?
- Only benefits, to maintain a positive tone
- Costs, benefits, risks, and a recommendation rationale (Correct answer)
- The option the author prefers with no alternatives
- A single financial metric for comparison
Correct answer: Costs, benefits, risks, and a recommendation rationale
Each option must be evaluated consistently across costs, benefits, and risks so decision-makers can make an informed choice.
Question 2: Which stakeholder is typically the primary audience for the executive summary of a business case?
- Front-line employees who will implement the project
- Senior executives and sponsors who approve funding (Correct answer)
- IT teams responsible for technical delivery
- External vendors bidding on the project
Correct answer: Senior executives and sponsors who approve funding
The executive summary is written for busy senior decision-makers who need a concise picture of the proposal without reading the full document.
Question 3: What does a 'Monte Carlo simulation' add to a business case financial analysis?
- A single-point best-case estimate
- A probability distribution of outcomes based on variable ranges (Correct answer)
- A fixed IRR figure approved by auditors
- A chart showing historical project performance
Correct answer: A probability distribution of outcomes based on variable ranges
Monte Carlo simulation runs thousands of random scenarios across variable ranges to produce a probability distribution of financial outcomes.
Question 4: In business case writing, 'scope creep' is a risk that should be addressed in which section?
- Executive Summary
- Risk and Mitigation section (Correct answer)
- Financial Appendix
- Stakeholder Directory
Correct answer: Risk and Mitigation section
Scope creepâuncontrolled expansion of project boundariesâis a common risk that belongs in the risk register with mitigation strategies.
Question 5: Which writing principle is most important when crafting the recommendation in a business case?
- Use passive voice to appear objective
- Be direct and clearly state the preferred option with supporting rationale (Correct answer)
- Defer the decision to avoid accountability
- Include all technical details to demonstrate thoroughness
Correct answer: Be direct and clearly state the preferred option with supporting rationale
A strong recommendation clearly states the preferred course of action and briefly explains why it is the best choice given the evidence.
Question 6: What is the primary difference between a business case and a project charter?
- A business case justifies whether to proceed; a project charter defines how to execute once approved (Correct answer)
- A project charter is written first to secure funding
- A business case is only used for IT projects
- They are interchangeable documents
Correct answer: A business case justifies whether to proceed; a project charter defines how to execute once approved
The business case answers 'should we do this?' while the project charter answers 'how will we deliver this?' after approval.
Question 7: Which of the following is a leading indicator that a business case is too optimistic?
- Benefits are phased in conservatively over multiple years
- Every scenarioâbest, base, and worstâshows a positive NPV (Correct answer)
- Risks are listed with quantified probability and impact
- Costs include a contingency reserve of 10-15%
Correct answer: Every scenarioâbest, base, and worstâshows a positive NPV
When all three scenarios produce positive NPV, it suggests the worst-case inputs are not sufficiently pessimistic, signaling over-optimism.
Business Case Writing Business Case Writing 3
When presenting multiple solution options in a business case, what should each option include?