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Better Business Cases Practitioner Questions 31–35 (page: 8)

Updated On: 10-Feb-2026
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Using the Scenario, answer the following questions about the Commercial Case for the Pittville project.

The following questions include only true statements about the project, but only two statements are appropriate entries for the suggested heading of the Commercial Case.

Remember to select 2 answers to each question.

Which 2 statements should be recorded under the Required services heading?

  1. 20% of the contract price is to be paid up front for materials.
  2. To increase the rate of 16-18-year-olds participating in education and training by at least 15% within the next three years.
  3. The major users of the finished campus will be 16-18 year old learners.
  4. The selected contractor will be responsible for taking measures to reduce any potential errors in the construction phase.
  5. All intellectual property rights are to be maintained by the Local Education Authority.

Answer(s): C,D



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Which 2 statements should be recorded under the Potential for risk transfer heading?

  1. Teaching staff will automatically become employees at the new campus with the same terms and conditions of employment.
  2. The selected contractor will be responsible for taking measures to reduce any potential errors in the construction phase.
  3. All construction work is to comply with standard building regulations.
  4. The new campus building is to be listed as an asset on the Local Education Authority balance sheet.
  5. The Local Education Authority is best placed to respond to possible opposition from staff and parents.

Answer(s): B,C



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Which 2 statements should be recorded under the Proposed charging mechanisms heading?

  1. The cost of any changes to the contract will need to be authorized by the Programme Change Board.
  2. The new campus building is to be listed as an asset on the Local Education Authority balance sheet.
  3. The return on the investment will repay the sum of the original investment over 10 years.
  4. The contract period for development of the new campus is three years.
  5. 20% of the contract price is to be paid up front for materials.

Answer(s): C,E



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Which 2 statements should be recorded under the Proposed key contractual clauses heading?

  1. Staff at the new campus will automatically become employees of Pittville University with the same terms and conditions of employment.
  2. The parties shall attempt to resolve any dispute through negotiations between senior executives of the parties, who have authority to settle the same.
  3. The new campus building is to be listed as an asset on the Local Education Authority balance sheet.
  4. The return on the investment will repay the sum of the original investment over 10 years.
  5. The contract period for development of the new campus is three years.

Answer(s): A,B



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HOTSPOT
Using the extract below from the Capital Profile for the new campus, answer the following questions.

(Note. The figures entered are correct).







  1. See Explanation for the Answer.

Answer(s): A

Explanation:

A . True, AND the reason explains the assertion. Operating costs are indeed revenue costs rather than capital costs and should not be included in the Capital Profile.
B . True, BUT the reason does not explain the assertion. The income from grants should not be shown on the Capital Profile if they are intended to support operating costs, which should be part of an Income and Expenditure Account. However, capital grants used for capital expenditures could be included in the Capital Profile.
E . False, False. There is no funding gap of $810,000. The Total Funding matches the Total Spend over the five years, as shown in the table.

A . True, AND the reason explains the assertion. Receipts from the sale of the school would typically be considered as contributing to the funding of capital costs for construction, aligning with the accountancy treatment of recognizing proceeds from asset disposal.



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