1.3 L4M2 LO1

Question 1

When evaluating a business case - what needs to be checked?

Answer 1

External environment
Organisational performance
Internal environment

Question 2

What are some of the ways to achieve an objective when talking about a business need

Answer 2

• There is more than one way of achieving an objective
• Work out which way the business case propose the business achieves the objective
• Ensure a number of options were considered

Question 3

Name 10 business benefits that could be included in a business case

Answer 3

• fulfilment of a specific business objective
• increased revenues
• reduced costs
• enhanced profitability
• enhanced value for money
• enhanced shareholder value
• competitive advantage
• leverage of key resources
• increased capacity, capability or flexibility
• improved brand or reputational equity

Question 4

What is risk assessment

Answer 4

The process of identifying and dealing with any potential hazards a project could face.

Question 5

Risk Mitigation - ACAT and the 4 Ts

Answer 5

AVOID IT
CONTROL IT
ACCEPT IT 
TRANSFER IT
-
TOLERATE IT
TRANSFER IT
TERMINATE IT
TREAT IT

Question 6

Ways a financial business case, financial budget model manages actual vs estimated costs

Answer 6

• Cost entries and timings of cash flows
• Performance and control of budgets
• Dealing with budget variances

Question 7

What is incremental budgeting?

Answer 7

• set up on the basis of what happened last year with an incremental increase of sales

Question 8

What is Zero Based Budgeting (ZBB)?

Answer 8

• based on the idea that all spending needs to be justified - not assuming that last year’s budget is used for this year’s budget. It is re-set to zero each year.

Question 9

What is Fixed budgets and flexible budgets?

Answer 9

FIXED - based on a particular activity such as producing a certain number of items

FLEXIBLE - based on a plan that the budget will change as the volume of output changes

Question 10

What is a financial budget?

Answer 10

A plan of how an organisational department proposes to raise income and then spend it.

Question 11

What is a plan-do-review cycle?

Answer 11

PLAN: Develop budget based on the business case approved

DO: Monitor variances and take action

REVIEW: Evaluate budget performance and re-plan