8/9 Chapter 9 Making a business and financial case

Question 1

Which of the following questions is true about Business Case?
Select one:
1. It should stress on features not benefits
2. It is a living document, revised as project progresses
3. It is subject to benefits realisation at feasibility stage
4. It is first defined during requirements analysis

Answer 1

It is a living document, revised as project progresses

Question 2

What options should be considered in business case for solving the business issue?
Select one:
1. Complex and simple options
2. Do nothing and do something option
3. Process and organisational options
4. Business and technical options

Answer 2

Business and technical options

Question 3

Which of the following would not be considered in assessing the business feasibility of a project?
Select one:
1. Whether it complies with relevant legislation
2. Whether it is a good cultural fit to the organisation
3. Whether it requires competencies not possessed by employees
4. Whether it produces an acceptable rate of return

Answer 3

Whether it produces an acceptable rate of return

Question 4

How would staff savings be classified?
Select one:
1. As an intangible cost
2. As an intangible benefit
3. As a tangible cost
4. As a tangible benefit

Answer 4

As a tangible benefit

Question 5

How would "Faster response to customers"  be classified?
Select one:
1. As an intangible benefit 
2. As a tangible cost
3. As an intangible cost
4. As a tangible benefit

Answer 5

As a tangible benefit

Question 6

How would "reduced inventory"  be classified?
Select one:
1. As an intangible benefit
2. As an intangible cost
3. As a tangible benefit
4. As a tangible cost

Answer 6

As a tangible benefit

Question 7

How would "reduced accommodation cost"  be classified in a business case?
Select one:
1. As an intangible benefit
2. As a tangible benefit
3. As a tangible cost
4. As an intangible cost

Answer 7

As a tangible benefit

Question 8

How would "reduced effort and improved speed of working"  be classified in a business case?
Select one:
1. As an intangible cost
2. As a tangible cost
3. As an intangible benefit 
4. As a tangible benefit

Answer 8

As a tangible benefit

Question 9

How would "Increased job satisfaction"  be classified in a business case?
Select one:
1. As an intangible benefit
2. As an intangible cost
3. As a tangible benefit
4. As a tangible cost

Answer 9

As an intangible benefit

Question 10

How would "Increased Customer satisfaction"  be classified in a business case?
Select one:
1. As an intangible cost
2. As a tangible cost
3. As an intangible benefit
4. As a tangible benefit

Answer 10

As an intangible benefit

Question 11

How would "Better management information"  be classified in a business case?
Select one:
1. As an intangible cost
2. As a tangible cost
3. As an intangible benefit
4. As a tangible benefit

Answer 11

As an intangible benefit

Question 12

How would "Greater organisational flexibility"  be classified in a business case?
Select one:
1. As an intangible benefit
2. As a tangible cost
3. As an intangible cost
4. As a tangible benefit

Answer 12

As an intangible benefit

Question 13

How would "More creative problem solving time"  be classified in a business case?
Select one:
1. As a tangible benefit
2. As a tangible cost
3. As an intangible benefit
4. As an intangible cost

Answer 13

As an intangible benefit

Question 14

How would "Improved presentation or better market image"  be classified in a business case?
Select one:
1. As a tangible cost
2. As an intangible benefit
3. As a tangible benefit
4. As an intangible cost

Answer 14

As an intangible benefit

Question 15

How would "Better communications"  be classified in a business case?
Select one:
1. As an intangible benefit
2. As an intangible cost
3. As a tangible benefit
4. As a tangible cost

Answer 15

As an intangible benefit

Question 16

How would "Disruption and loss of productivity"  be classified in a business case?
Select one:
1. As a tangible benefit
2. As an intangible cost
3. As an intangible benefit
4. As a tangible cost

Answer 16

As an intangible cost

Question 17

How would "Recruitment"  be classified in a business case?
Select one:
1. As an intangible cost
2. As a tangible benefit
3. As a tangible cost
4. As an intangible benefit

Answer 17

As a tangible cost

Question 18

How would "Development staff costs"  be classified in a business case?
Select one:
1. As an intangible benefit
2. As an intangible cost
3. As a tangible cost
4. As a tangible benefit

Answer 18

As a tangible cost

Question 19

How would "User staff costs"  be classified in a business case?
Select one:
1. As an intangible cost
2. As a tangible benefit
3. As an intangible benefit
4. As a tangible cost

Answer 19

As a tangible cost

Question 20

How would "Hardware"  be classified in a business case?
Select one:
1. As a tangible benefit
2. As a tangible cost
3. As an intangible cost
4. As an intangible benefit

Answer 20

As a tangible cost

Question 21

How would "Infrastructure"  be classified in a business case?
Select one:
1. As an intangible cost
2. As an intangible benefit
3. As a tangible benefit
4. As a tangible cost

Answer 21

As an intangible cost

Question 22

How would "Packaged software"  be classified in a business case?
Select one:
1. As a tangible cost
2. As a tangible benefit
3. As an intangible benefit
4. As an intangible cost

Answer 22

As a tangible cost

Question 23

How would "Relocation"  be classified in a business case?
Select one:
1. As an intangible benefit
2. As a tangible cost
3. As an intangible cost
4. As a tangible benefit

Answer 23

As a tangible cost

Question 24

How would "Staff training and retraining"  be classified in a business case?
Select one:
1. As a tangible cost
2. As an intangible benefit
3. As an intangible cost
4. As a tangible benefit

Answer 24

As a tangible cost

Question 25

Consider the following cash flows.
In which year does the project pays back

Screenshot 2020-07-06 at 22.01.55

Select one:

1. Year 2
2. Year 3
3. Year 4
4. Year 5

Answer 25

Year 3

Question 26

Which one of the following statements is true?
Select one:
1. When considering investments, the project with the lowest capital outlay is always preferable
2. Most companies would choose a project based on organisational fit rather than for financial reasons
3. The internal rate of return (IRR) is calculated by determining which discount rate will achieve a net present value (NPV) of zero
4. Net Present Value (NPV) does not take into account the time value of money

Answer 26

The internal rate of return (IRR) is calculated by determining which discount rate will achieve a net present value (NPV) of zero

Question 27

When assessing the feasibility of an option, which tool can help identify factors that can help or hinder the proposal?
Select one:
1. Force field analysis
2. PESTLE analysis
3. Stakeholder analysis
4. Porter's 5 Forces

Answer 27

Force field analysis

Question 28

Which of the following would be considered when assessing the financial feasibility of a project?
Select one:
1. Return on investment (ROI)
2. Market conditions
3. Proven technology
4. Enterprise architecture

Answer 28

Return on investment (ROI)

Question 29

Which investment appraisal tecnique allows an organisation to compare a proposed investment against leaving the money in the bank?
Select one:
1. Internal Rate of Return (IRR)
2. Discounted cash flow (DCF)
3. Payback
4. Net Present Value (NPV)

Answer 29

Internal Rate of Return (IRR)

Question 30

Who should be assigned ownership of a risk?
Select one:
1. The person who defines the probability of the risk
2. The person best placed to take the necessary counter-measures to the risk
3. The person who documented the risk
4. The person who initially identified the risk

Answer 30

The person best placed to take the necessary counter-measures to the risk

Question 31

A company needs to upgrade its hardware at a cost of £3 million to be able to run the new version of its third-party regulatory reporting system or risk lack of support from being behind the upgrade curve.  It has been suggested that an alternative option is to change to a completely different supplier who provides a hosted solution which will mean that this situation will not occur again.  Although this will cost £5 million, it fits with the long-term IT strategy to outsource all non-core systems as well as having the additional benefit of cheaper maintenance costs and transfer of the responsibility for keeping up-to-date with any regulatory changes. What is the avoided cost in this proposal?
Select one:
1. £5 million
2. £2 million
3. £3 million
4. £8 million

Answer 31

£3 million

Question 32

Which of the following would be documented about a risk?
Select one:
1. Interdepartmental relations
2. Organisation structure
3. Working practices
4. None of the above

Answer 32

None of the above