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Better Business Cases Practitioner Questions 36–40 (page: 9)

Updated On: 10-Feb-2026
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Using the Scenario, answer the following questions about the Financial Appraisal of the option to build a new campus on the site of the Old Fire Station Headquarters.

Decide whether the action taken represents an appropriate application of the Five Case Model for this project and select the response that supports your decision.

The cost of inflation is estimated to be 2% per annum.

Should the project manager use this information when preparing the Financial Appraisal for this scheme?

  1. No, because the Financial Appraisal should include constant or real prices.
  2. No, because the Financial Appraisal should exclude the cost of general inflation and depreciation.
  3. Yes, because the Financial Appraisal should include the cost of inflation.
  4. Yes, because inflation will reduce the cost of the scheme over time.

Answer(s): C



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Temporary accommodation has been put on the site of the Old Fire Station Headquarters whilst the development of the new campus takes place.

Should the cost of the temporary accommodation be treated as a capital cost within the Financial Appraisal?

  1. No, because the Financial Appraisal should NOT contain capital costs.
  2. No, because construction and refurbishment costs should be treated as revenue costs.
  3. Yes, because all running costs must be accounted for.
  4. Yes, because these are a cost of developing the scheme.

Answer(s): D



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The new campus scheme will take three years to complete. Projected inflation over this period will mean that staffing costs will be 6%

higher when the campus is operational.

Should this increase be managed as a risk to the project?

  1. No, because inflation should be included as a cost in the Financial Appraisal.
  2. No, because any increase in cost should be dealt with as an issue.
  3. Yes, because any cost increase could threaten the affordability of a scheme.
  4. Yes, because any risk that might affect the financial viability of a scheme should be closely managed.

Answer(s): C



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It is estimated that 60% of the taxation costs on the development will NOT be reclaimable.

Should the unclaimable taxation costs be excluded from the Financial Appraisal?

  1. No, because the Financial Appraisal should demonstrate value for money.
  2. No, because both resource and non-resource costs and benefits should be factored into the analysis.
  3. Yes, because taxation costs should be excluded from the Financial Appraisal.
  4. Yes, because it is the Economic Case that should include inflation and taxation costs.

Answer(s): B



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Using the Scenario, answer the following questions about roles and responsibilities on the Pittville project.

Which action should be completed by the sponsor for the Western Area Learning Improvements Programme?

  1. Plan, in detail, the construction of the new learning campus.
  2. Appoint a Senior Responsible Owner for the Pittville project.
  3. Produce regular reports on progress of the development of the new learning campus for the Senior Responsible Owner of the project.
  4. Develop the preferred way forward for the Pittville project.

Answer(s): B



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