Business Case Writing Business Case Writing MCQ 5 — Questions and Answers
Question 1: A project sponsor rejects a business case because it lacks a clear problem statement. What does this indicate about the document?
- The financial model was too complex
- The document failed to establish the need for change (Correct answer)
- The risk section was too detailed
- The appendices were missing
Correct answer: The document failed to establish the need for change
Without a clear problem statement, stakeholders cannot assess why the investment is necessary or what success looks like.
Question 2: Which discount rate is most commonly used in public sector business cases to calculate Net Present Value?
- The organization's weighted average cost of capital (WACC)
- A government-specified social discount rate (Correct answer)
- The prime lending rate set by the central bank
- The internal hurdle rate set by the CFO
Correct answer: A government-specified social discount rate
Public sector bodies (e.g., using HM Treasury or OMB guidance) apply a mandated social discount rate to reflect societal time preference.
Question 3: What is the key difference between a project charter and a business case?
- A charter is written after project completion; a business case is written before
- A business case justifies why a project should be approved; a charter authorizes it to begin (Correct answer)
- A charter includes financial analysis; a business case does not
- They are different names for the same document
Correct answer: A business case justifies why a project should be approved; a charter authorizes it to begin
The business case makes the investment argument; once approved, the charter formally authorizes the project and assigns the project manager.
Question 4: In business case writing, 'scope creep' during the development phase can best be managed by:
- Expanding the problem statement to include all issues
- Defining clear boundaries and exclusions in the scope section (Correct answer)
- Removing the constraints section to allow flexibility
- Waiting until implementation to define scope
Correct answer: Defining clear boundaries and exclusions in the scope section
Explicitly stating what is out of scope prevents stakeholders from expanding the solution beyond what the financials support.
Question 5: When presenting two financial options with similar NPVs, what additional factor most often determines the recommended choice?
- Which option was proposed first
- Risk profile, strategic alignment, and implementation complexity (Correct answer)
- The length of each option's description
- The seniority of the option's champion
Correct answer: Risk profile, strategic alignment, and implementation complexity
When financials are comparable, risk exposure, fit with strategy, and delivery confidence become the decisive differentiators.
Question 6: Which writing technique improves the readability of a lengthy business case for busy executives?
- Using dense paragraphs to convey thoroughness
- Employing headers, bullet points, and a strong executive summary (Correct answer)
- Writing in passive voice throughout
- Avoiding visual aids to maintain formality
Correct answer: Employing headers, bullet points, and a strong executive summary
Clear structure with headers, bullets, and a self-contained executive summary lets readers navigate and extract key points quickly.
Question 7: A business case recommendation is most credible when it is supported by:
- The author's personal conviction and tenure
- Independent data, benchmarks, and cross-functional input (Correct answer)
- A single expert opinion from the project team
- Positive feedback collected only from project supporters
Correct answer: Independent data, benchmarks, and cross-functional input
Independent data, external benchmarks, and diverse stakeholder perspectives remove the appearance of bias and strengthen the recommendation.
Business Case Writing Business Case Writing MCQ 5
A project sponsor rejects a business case because it lacks a clear problem statement.
What does this indicate about the document?