BAPv5 BCS Practitioner Certificate in Business Analysis Practice v5.2 Questions and Answers

 A business case is a formal written proposal that details the costs and benefits of a proposed business change or solution. It helps to justify and secure the approval and funding for a proposed business change or solution. A business case typically consists of several elements, such as description of the current situation, analysis of costs and benefits, options considered, recommendations, impact assessment, risk assessment etc. Therefore, option A is the correct answer, as it identifies which set of elements of a business case will cover all of these points respectively. Description of the current situation is an element that describes the problem or opportunity that exists in the current state and the need or rationale for a change or solution. It helps to explain what is wrong or missing in the current state and what are the objectives and outcomes of a change or solution. This element will cover the point that the threat posed to the organisation from cyber attack, and therefore the justification for the project, needs to be clearly articulated. Analysis of costs and benefits is an element that evaluates the financial and non-financial impacts of a proposed change or solution. It helps to compare and contrast the costs and benefits of different options or solutions and determine their feasibility and desirability. This element will cover the point that the benefits of cyber will be described in quantitative terms, so we will need to describe these qualitatively. Options considered is an element that identifies and describes the alternative ways of addressing a problem or opportunity. It helps to explore and analyse the pros and cons of different options or solutions and select the best one based on criteria and evidence. This element will cover the point that we need to make it clear that we have fully explored the solution market, and we have considered a range of approaches to meeting the objectives of this project. Option B is not a correct answer, as it does not identify which set of elements of a business case will cover all of these points respectively. Impact assessment is an element that assesses the effects or consequences of a proposed change or solution on people, processes, organisation and technology. It helps to identify who or what will be affected by a proposed change or solution and how they will be affected. This element will not cover any of these points. Recommendations is an element that proposes and justifies the preferred option or solution for addressing a problem or opportunity. It helps to persuade and convince decision makers or influencers to approve and fund a proposed change or solution. This element will not cover any of these points. Option C is not a correct answer, as it does not identify which set of elements of a business case will cover all of these points respectively. Recommendations is an element that proposes and justifies the preferred option or solution for addressing a problem or opportunity. It helps to persuade and convince decision makers or influencers to approve and fund a proposed change or solution. This element will not cover any of these points. Risk assessment is an element that identifies and evaluates the uncertainties or threats that may affect a proposed change or solution. It helps to estimate the likelihood and impact of risks and plan how to avoid or mitigate them. This element will not cover any of these points. Option D is not a correct answer, as it does not identify which set of elements of a business case will cover all of these points respectively. Description of the current situation is an element that describes the problem or opportunity that exists in the current state and the need or rationale for a change or solution. It helps to explain what is wrong or missing in the current state and what are the objectives and outcomes of a change or solution. This element will cover the point that the threat posed to the organisation from cyber attack, and therefore the justification for the project, needs to be clearly articulated. Impact assessment is an element that assesses the effects or consequences of a proposed change or solution on people, processes, organisation and technology. It helps to identify who or what will be affected by a proposed change or solution and how they will be affected. This element will not cover any of these points. Risk assessment is an element that identifies and evaluates the uncertainties or threats that may affect a proposed change or solution. It helps to estimate the likelihood and impact of risks and plan how to avoid or mitigate them. This element will not cover any of these points.

The Operations Director for FlyMe is concerned about the market demand and profitability of the new business proposition. Therefore, she will be keen to ensure that the planning activities that address these concerns are discussed before the meeting ends. These activities are c and f, as they involve determining the demand amongst existing customers and defining the bundle pricing. These activities will help to assess the feasibility and viability of the new offering. Option A is the correct answer.

The stakeholder management strategy for senior managers should be constant active management. Senior managers have high power and high interest in the project, as they are responsible for overseeing its implementation and ensuring its alignment with organizational goals. They also have influence over other stakeholders, such as end users and employees. Therefore, they need to be regularly engaged, consulted, informed, and involved in decision making throughout the project lifecycle. Option B is the correct answer.

An external requirement is a business rule that is imposed by an external source, such as a law, regulation, or standard. The business rule in this question is a legal obligation that EuroCoach has to comply with, so it is an external requirement. Option C is the correct answer.

The guidance on prior research for business analysis work states that analysts should first study relevant background material to gain an “entry point” into the domain before undertaking deeper investigation. For projects focused on specific processes (such as re-engineering a customer-facing process with excessive handoffs), the documentation explicitly recommends studying procedure manuals and current system documentation to understand what the process is supposed to be and how it is documented. It also recommends studying the organisation chart to understand reporting lines, functional groupings, and where responsibilities and handoffs may occur—particularly important here because the goal is to reduce handoffs and support remote working practices.

Financial statements and annual reports can be useful for strategic or corporate-level analysis, but the scenario is operational and process-focused (re-engineering a process linked to declining customer satisfaction). The most direct “initial analysis” sources, aligned with the prescribed prior-research approach for process-oriented work, are therefore procedure manuals/documentation and organisation charts.

Crucially, the guidance cautions that documentation may become out of date and can reflect “what we thought it ought to have been,” so these sources support orientation and preparation, but they must be followed by proper investigation techniques (e.g., interviews, observation, workshops, and quantitative methods) to confirm what actually happens in practice.

CATWOE is a technique that helps to understand different perspectives of a situation by analyzing six elements: Customers, Actors, Transformation process, Worldview, Owner, and Environmental constraints. Shelly could use CATWOE to improve her understanding of the IT and finance director’s views on the future direction of the business, by identifying who are the customers, actors, owners, and so on for each option (organic growth or acquisition), and how they differ. Option A is the correct answer.

The power/interest grid is used to decide the most appropriate stakeholder management approach based on the stakeholder’s power/influence and interest. The guidance shows a set of basic strategies, including “Ignore” (low power/low interest), “Keep informed” (high interest/low power), “Keep satisfied” (high power/low interest), and “Constant active management” for those with high power and high interest.

A project sponsor is typically a key decision-maker and champion for the change, usually possessing high influence and a strong stake in success (high interest). Under the documented strategies, stakeholders in that top-right quadrant require constant active management—ongoing engagement, involvement in decisions, and frequent communication—so statement A is true.

Statement B is false because regulators may sometimes fall into a “keep satisfied” profile, but the guidance does not support the idea that they will always sit in a single box; their interest can rise sharply if breaches are suspected. Statement C is false because high power with only “some” interest is managed by keeping satisfied, not merely “watching.” Finally, customers are explicitly identified as stakeholders and cannot be “always ignored.”

The business analysis guidance notes that reviewing a company website can reveal useful inferences about the organisation’s branding, values, priorities, and strategic positioning, including how it balances cost versus perceived quality. In particular, the guidance contrasts “populist” signals (primary colours, flashing icons, exclamation marks, “Bargain!” language) with a quieter, more restrained design, which tends to imply a more premium / quality-focused positioning.

The described site is muted (greys/whites), uses “lots of white space,” and includes only a few carefully chosen images. Those choices align strongly with conclusion D: the company is positioning its offering as high quality rather than “cheap and cheerful.” The seamless movement through information and concise, well-structured sections also indicate attention to usability and information architecture—signals consistent with high technical and design standards (conclusion C).

However, nothing in the description proves the firm is “well established” (A), “market leading” (B), or “very profitable” (E). Those claims require external evidence (market share, history, financial performance), whereas the website evidence supports positioning and quality/technical execution, not market status or profitability.

A brand is a name, term, design, symbol or any other feature that identifies one seller’s good or service as distinct from those of other sellers. A brand perception is how customers and potential customers view a brand based on their experiences, associations and impressions. Therefore, option A is the best choice, as independent industry websites are likely to provide unbiased and reliable information on how customers perceive different brands in the market. They may also include customer reviews, ratings and feedback that can help measure customer satisfaction and loyalty. Option B is not a good choice, as the company website is likely to provide biased and selective information on its own brand that may not reflect how customers actually perceive it. It may also omit negative aspects or criticisms that could affect its image or reputation. Option C is not a good choice, as the company’s organisational structure is not relevant to its brand perception. It may show how the company is organised internally, but it does not indicate how customers view its products or services externally. Option D is not a good choice, as the company’s complaints procedures are not sufficient to measure its brand perception. They may show how the company handles customer issues or problems, but they do not capture how customers feel about its overall quality or value.

 A vision statement is a concise and inspiring statement of what the organisation aspires to be in the future. It should reflect the organisation’s core values and purpose, and provide direction and motivation for its stakeholders. A vision statement should not be too specific or focused on the current state of the organisation, but rather on the desired future state. Therefore, option A is the best choice, as it expresses a clear and aspirational vision that aligns with the company’s mission of meeting or undercutting all its competitors’ prices. Option B is too narrow and does not capture the essence of the organisation’s purpose. Option C is too vague and does not indicate how the organisation will achieve its goal. Option D is too generic and does not differentiate the organisation from its competitors.

A SWOT analysis is a technique for identifying and evaluating the strengths, weaknesses, opportunities and threats that affect an organisation or project. It helps to assess the internal and external factors that influence the performance and potential of the organisation or project. Therefore, options A, B and C are correct answers, as they should be included in the SWOT analysis for the company that sells van insurance. They describe different types of factors that affect the company’s situation and prospects. Option A describes an opportunity, which is a favourable or advantageous circumstance or situation that arises from the external environment and that can be exploited to achieve the objectives of the organisation or project. An example of an opportunity is the increase in home shopping, which has led to an increase in delivery drivers and vehicles across both markets. This creates a potential demand for van insurance that the company can cater to. Option B describes a weakness, which is a negative or unfavourable characteristic or situation that arises from the internal environment and that can hinder or prevent the achievement of the objectives of the organisation or project. An example of a weakness is the inability of the call centre to deal with the large influx of calls, which may result in poor customer service, dissatisfaction and loss of business. Option C describes a threat, which is a harmful or adverse circumstance or situation that arises from the external environment and that can endanger or damage the achievement of the objectives of the organisation or project. An example of a threat is the new regulatory hurdles following Brexit, which may affect the company’s ability to trade in Ireland and reduce its market share and revenue. Option D is not a correct answer, as strength is not a factor that has been discovered in the investigation for the SWOT analysis. A strength is a positive or favourable characteristic or situation that arises from the internal environment and that can facilitate or enhance the achievement of the objectives of the organisation or project. Option E is not a correct answer, as technology is not a type of factor that can be included in a SWOT analysis. Technology is an aspect of the external environment that can affect an organisation or project positively or negatively, depending on how it is used or adapted to.

The end users are classified as high interest, low power on a power/interest grid. This is because they are directly affected by the new reporting tool and have a strong preference for not using it, but they do not have much authority or influence to change the project decision or outcome. Option A is the correct answer.

A Business Activity Model (BAM) is a technique for modelling business activities within an organisation or project at a high level of abstraction. It helps to understand what an organisation does, how it does it, who does it, where it does it and why it does it. Therefore, options A and D are correct answers, as they apply to a BAM. Option A applies to a BAM, as multiple BAMs could be created to reflect different perspectives of different stakeholder groups within or outside the organisation or project. A BAM is not a single or definitive representation of the business activities, but a subjective and contextual view that depends on the purpose and scope of the analysis. Option D applies to a BAM, as the activities are most likely to be shown in boxes in a BAM. A BAM is typically represented as a diagram that consists of boxes and arrows. The boxes represent the high level activities that the organisation performs or delivers, and the arrows represent the flow or sequence of the activities. Option B does not apply to a BAM, as the owner should not always choose the final BAM. The owner is one of the stakeholder groups that may have a perspective on the business activities, but not the only or ultimate one. The final BAM should be agreed by all relevant stakeholder groups based on their needs and expectations. Option C does not apply to a BAM, as normally a consensus BAM will not be produced. A consensus BAM is a BAM that reflects a common or shared perspective of all stakeholder groups within or outside the organisation or project. A consensus BAM is not realistic or desirable, as different stakeholder groups may have different or conflicting views on the business activities. Option E does not apply to a BAM, as dependencies between the activities are shown in a BAM. Dependencies between the activities are the relationships or connections that indicate how one activity affects or influences another activity. Dependencies between the activities are shown by the arrows in a BAM diagram.

An enabling activity is an activity that supports or facilitates another activity within an organisation or project. It helps to ensure that another activity can be performed or delivered effectively and efficiently. Therefore, option B is the correct answer, as check adherence to regulation is an enabling activity that supports provide insolvency services, which is the primary doing activity of a BAM reflecting DeanLegal’s business perspective. Check adherence to regulation is an enabling activity, as it involves verifying that the insolvency services provided by DeanLegal comply with the rules and standards set by the Federation of Insolvency Practitioners (FIP). It helps to ensure that DeanLegal can perform its primary doing activity legally and ethically. Option A is not a correct answer, as provide comprehensive support to customers is not an enabling activity that supports provide insolvency services, but another doing activity within DeanLegal’s business perspective. Provide comprehensive support to customers is a doing activity, as it involves delivering value and satisfaction to customers who use DeanLegal’s insolvency services. It helps to achieve DeanLegal’s objectives and outcomes. Option C is not a correct answer, as extend range of services is not an enabling activity that supports provide insolvency services, but a potential change or improvement within DeanLegal’s business perspective. Extend range of services is a change or improvement, as it involves introducing new types of services, such as advice in funding the purchase of capital assets, that DeanLegal may offer to its customers in addition to its insolvency services. It helps to enhance DeanLegal’s performance and potential. Option D is not a correct answer, as recruit experienced negotiators is not an enabling activity that supports provide insolvency services, but a resource audit within DeanLegal’s business perspective. Recruit experienced negotiators is a resource audit, as it involves identifying and evaluating the human resources that DeanLegal has or needs to perform its insolvency services. It helps to assess the availability and quality of DeanLegal’s staff.

Gap analysis is a process of identifying and assessing the differences between the current state and desired state of an organisation or project. It helps to determine what needs to be done to achieve business objectives or solve business problems. Gap analysis typically involves three main steps: understand the existing situation, compare the desired situation and existing situation, and consider possible actions to address the gaps. Therefore, options A, B and C are correct answers, as they cover these steps in gap analysis. Option D is not a correct answer, as defining solutions to close gaps is not part of gap analysis itself, but rather a subsequent step that follows gap analysis. Gap analysis helps to identify what needs to be done, but not how it should be done. Option E is not a correct answer, as delivering solutions to close gaps is not part of gap analysis itself, but rather a final step that follows defining solutions. Gap analysis helps to identify what needs to be done, but not how it should be done or implemented.

The documentation defines gap analysis as exploring the differences between a current state (“as is”) and a desired future state (“to be”). The emphasis is on understanding where the organisation wants to be and, by comparing with the current situation, identifying what needs to change to reach that target state. It also states that the outcome of gap analysis is a list of business requirements to be delivered—typically phrased at the “what” level rather than prescribing detailed solutions.

In this scenario, the retailer’s desired future state includes a more capable online experience and integration with inventory and other applications—this is fundamentally a change in capability. Therefore, identifying new and improved business capabilities (and capturing them in a target view such as a Target Operating Model) is exactly the kind of work performed in gap analysis: it clarifies what the future business system must be able to do, so gaps against the current capabilities can be identified and addressed.

By contrast, a Gantt chart (A/B) is delivery planning, not gap analysis; a RACI matrix (C) is a responsibilities definition; and brainstorming (D) is an idea-generation technique that may help option creation but is not the core “compare as-is to to-be and identify gaps” activity.

The event ‘amend KPI’ would affect the activity ‘define performance targets’, as the company would need to change its current performance target of gross profit margin to ROCE. The other activities would not be directly affected by this event, as they are either related to monitoring or defining other aspects of the business. Therefore, option A is the correct answer.

The documentation explains that feasibility evaluation commonly considers business, technical, and financial feasibility. It also provides a feasibility framework describing business feasibility as including strategic fit, market/timeliness considerations, and organisational/cultural fit; and technical feasibility as including compatibility, architecture fit, skills, reliability, performance, security, and whether the technology is proven.

In the scenario, the analyst has “checked alignment with VMOST and checked the business capabilities.” That is a direct assessment of business feasibility: whether the option supports the organisation’s vision/mission/objectives/strategy and whether it fits the required business capability model (i.e., whether it supports what the business must be able to do). This is exactly the “strategic fit / business fit” focus described under business feasibility.

The analyst then plans “further research on the limitations of the AI features.” That is a technical feasibility concern: the AI marking function may or may not work adequately, may have constraints, may require specific data quality, or may not integrate well with the enterprise architecture. Investigating limitations is therefore assessing whether the technology can deliver the required performance and capabilities.

No explicit financial feasibility work (budget, ROI) is described, and timescale/project feasibility are not used as the primary feasibility categories in the text. Therefore, the two feasibility aspects considered are Business and Technical.

A resource audit is a technique for identifying and evaluating the resources that an organisation has or needs to achieve its objectives. It helps to assess the availability and quality of an organisation’s resources, such as human, physical, financial and intangible resources. Therefore, option C is the correct answer, as it identifies which of these would be considered as ‘tangible’ resources in a resource audit. Tangible resources are resources that have physical existence and can be seen or touched by human senses. Examples of tangible resources are machinery, equipment, buildings, materials, money etc. Option A identifies ‘a’ (recent investment in new machinery), ‘c’ (the number of staff currently employed in the company) and ‘e’ (the company has significant retained profits) as tangible resources in a resource audit. These are correct examples of tangible resources in a resource audit, as they have physical existence and can be seen or touched by human senses. Option B identifies ‘b’ (feedback from customers and an increase in sales), ‘c’ (the number of staff currently employed in the company) and ‘e’ (the company has significant retained profits) as tangible resources in a resource audit. These are incorrect examples of tangible resources in a resource audit, as ‘b’ (feedback from customers and an increase in sales) is an intangible resource, not a tangible resource. Intangible resources are resources that have no physical existence and cannot be seen or touched by human senses. Examples of intangible resources are reputation, brand, knowledge, skills etc. Option D identifies ‘c’ (the number of staff currently employed in the company), ‘d’ (the ability of EcoBags to respond quickly to new market demands) and ‘e’ (the company has significant retained profits) as tangible resources in a resource audit. These are incorrect examples of tangible resources in a resource audit, as ‘d’ (the ability of EcoBags to respond quickly to new market demands) is an intangible resource, not a tangible resource.

A workshop is a technique for conducting group discussions and activities with stakeholders to elicit, analyse, validate and prioritise their views and needs. It helps to facilitate effective communication and collaboration among stakeholders and resolve conflicts or issues. Therefore, option D is the correct answer, as a workshop would help the business analyst to resolve the conflict and gain a consensus among stakeholders who have different views after individual interviews. A workshop would help to bring together the conflicting stakeholders in one place and time and enable them to share and compare their views openly and constructively. A workshop would help to identify and address the sources and reasons of the conflict and find common ground and mutual understanding among stakeholders. A workshop would help to generate and evaluate different options or solutions that satisfy all or most of the stakeholder views and agree on the best one for further development and implementation. Option A is not a correct answer, as scenario analysis is not a technique for resolving conflict and gaining consensus among stakeholders who have different views after individual interviews. Scenario analysis is a technique for exploring how different scenarios or situations could affect the outcomes or impacts of an organisation or project. It helps to test the feasibility and desirability of different options or solutions under various circumstances or assumptions. Option B is not a correct answer, as questionnaire is not a technique for resolving conflict and gaining consensus among stakeholders who have different views after individual interviews. Questionnaire is a technique for collecting information from stakeholders by asking them predefined questions in written form. It helps to elicit quantitative or qualitative data from a large number of stakeholders in an efficient and consistent way. Option C is not a correct answer, as observation is not a technique for resolving conflict and gaining consensus among stakeholders who have different views after individual interviews. Observation is a technique for gathering information from stakeholders by watching them perform their tasks or activities in their natural environment. It helps to analyse how stakeholders work in practice and identify their implicit or tacit needs.

The glossary definition of a Business Activity Model states that it contains five activity types: Planning, Enabling, Doing, Monitoring, and Controlling. In the provided list, we can map each activity to these categories using the documented explanations and examples.

“Monitor call quality” is clearly a Monitoring activity, because monitoring activities measure performance and check whether expected results are being achieved. “Take control actions” is a Controlling activity. The guidance explains that when monitoring reveals performance is not as expected, control activities are required to institute remedial actions, and it provides an explicit example of a control activity (“Take control action”) on a BAM.

The remaining activities—“Define telesales skills,” “Determine sales targets,” and “Research target customers”—are Planning activities. The documentation describes planning activities as those that set direction for the business system, including defining numbers/skills needed and setting targets/KPIs. It also shows examples such as “Define target customers,” “Define nos/skills,” and “Define sales targets” as planning items on a BAM.

None of the listed items are Doing (the core operational delivery activity) or Enabling (acquiring/replenishing resources). Therefore, the three categories represented are Planning, Monitoring, and Controlling.

The pair of techniques that Elizabeth should use first to understand the concerns of operational staff and line managers are interviews and rich pictures. Interviews are a way of eliciting information from stakeholders by asking them open-ended questions and listening to their responses. Interviews can help Elizabeth to explore the views, opinions, needs, and expectations of the staff and managers regarding the process improvement project. Rich pictures are a way of capturing complex situations in a visual form by using symbols, icons, cartoons, or diagrams. Rich pictures can help Elizabeth to illustrate the current problems and issues faced by the staff and managers, as well as their emotions and relationships. Option D is the correct answer.

Divergent and convergent thinking are most valuable when a team is generating options and then narrowing them down to the most promising set. In the business analysis guidance, this pattern appears in the creative problem-solving material: once ideas have been stimulated using creative thinking techniques (idea generation), they are then evaluated so the team can focus on ideas that could provide solutions (selection and refinement). This explicit “generate many ideas → evaluate and focus” flow is the essence of divergent (expanding possibilities) followed by convergent thinking (reducing and choosing).

Mapped to the Design Thinking Process, this aligns most directly to the Ideate stage. Ideation is where teams deliberately explore alternatives, challenge assumptions, and use creativity tools to produce a wide range of concepts before assessing them. The guidance also cautions against moving into solution selection too early and highlights that solution finding comes later, after other aspects have been considered—reinforcing that ideation should first widen thinking before converging on the best options.

By contrast, Empathise focuses on understanding users and their context, and Define focuses on clarifying the problem statement. Those stages can involve analysis and synthesis, but the documented “creative ideas then evaluate and focus” approach is most characteristically the work of Ideate.

A logical dependency arrow on a BAM shows that one activity depends on another activity for its completion or initiation. In this question, the doing activity of ‘sell bespoke kitchens’ depends on the planning activity of ‘determine range of products’, as the customers need to select products from a predefined range when they design their kitchens. Therefore, option C is the correct answer.

A Business Activity Model (BAM) is a high-level view of the business activities that take place within an organisation. It shows how activities are related to each other and how they contribute to achieving business objectives. A BAM consists of five types of high-level activities: directing, enabling, doing, monitoring and controlling. A BAM can also show dependencies between activities using arrows to indicate which activity depends on another activity to start or finish. Therefore, option A is the correct answer, as it shows the dependencies between the four activities on the BAM correctly. Activity c (define lending policies) is a directing activity that sets the rules and guidelines for lending e-books to customers. It depends on no other activity and precedes all other activities. Activity b (establish licensing arrangements with publishers) is an enabling activity that secures the rights and permissions to lend e-books from different publishers. It depends on activity c and precedes activity a. Activity a (lend books) is a doing activity that provides e-books to customers according to their requests and preferences. It depends on activity b and precedes activity d. Activity d (monitor lending usage) is a monitoring activity that tracks and records how customers use and return e-books. It depends on activity a and follows all other activities.

 A Business Activity Model (BAM) is a technique for modelling business activities within an organisation or project at a high level of abstraction. It helps to understand what an organisation does, how it does it, who does it, where it does it and why it does it. Therefore, option D is the correct answer, as a BAM would help the business analyst to identify underlying causes of a problem with declining sales. A BAM would help to analyse how different activities within an organisation contribute or relate to sales performance and identify any gaps or issues that may affect sales performance. A BAM would help to compare current and desired situations or problems and identify what changes or improvements are needed to achieve desired situations or problems. Option A is not a correct answer, as customer journey maps are not a technique for identifying underlying causes of a problem with declining sales. Customer journey maps are a technique for visualising customer experiences with an organisation or product across different touchpoints and stages. They help to understand customer needs, expectations and emotions and how they are met or influenced by an organisation or product. Option B is not a correct answer, as scenario analysis is not a technique for identifying underlying causes of a problem with declining sales. Scenario analysis is a technique for exploring how different scenarios or situations could affect outcomes or impacts of an organisation or project. They help to test feasibility and desirability of different options or solutions under various circumstances or assumptions. Option C is not a correct answer, as use case diagram is not a technique for identifying underlying causes of a problem with declining sales. Use case diagram is a technique for modelling functional requirements of a system or product at a high level of abstraction. They help to understand what functions or features are required or provided by a system or product and how they interact with actors or users.

The guidance distinguishes Payback and Discounted Cash Flow (DCF) by whether they account for the time value of money. Payback uses current values of incoming and outgoing cash flows and does not adjust for the declining value of money over time. DCF, by contrast, explicitly discounts future net cash flows back to today’s value, producing measures such as Net Present Value (NPV).

A key practical reason to use DCF is when the discount rate (reflecting the cost of capital and prevailing financial conditions) matters. The documentation explains that management accountants determine the discount rate by studying factors including the likely movement of money-market interest rates in the coming years. If interest rates are expected to increase, the cost of capital and the opportunity cost of money can rise, making future cash inflows less valuable in today’s terms and potentially reducing project attractiveness. DCF is designed to reflect exactly this broader financial context through discounting.

Option A (“cost of raising capital is nil”) would reduce the importance of discounting rather than increase it. Option B is about the desired level of detail, not financial appropriateness. Option D (“deposits earning no interest”) does not indicate rising rates or a need to adjust for changing time value; if anything, it suggests a lower opportunity cost at present. Therefore, the factor that indicates DCF should be used is C.

The business case guidance states that risk assessment should identify principal risks and—critically—define countermeasures: what can be done to reduce the likelihood of the risk occurring or lessen its impact. It notes that some risks can be transferred (e.g., via insurance), but the key is choosing countermeasures that actually address the cause.

Here, the risk is behavioural: managers may struggle to adopt a new management style required by the change. The book explicitly recognises that business change often requires changes to working practices and sometimes management style, especially where roles and authority shift. The most direct countermeasure is to build capability and readiness in the affected managers—through training, education, coaching, and support—so they understand the new behaviours, can practise them, and can be reinforced through agreed expectations. This reduces both the probability of failure (managers not changing) and the impact (inconsistent adoption harming productivity).

Option A (insurance) does not address behavioural adoption; it might transfer financial impact in some scenarios but won’t make managers change. Option C explicitly avoids change and therefore cannot mitigate the stated risk. Option B could work in extreme cases, but replacing the entire management team is a far more disruptive and costly response than necessary and is not the “most likely” effective countermeasure when the risk is capability/behaviour adoption. Therefore, training and educating the managers is the most appropriate countermeasure.

CATWOE is used to explore stakeholder perspectives by examining six elements: Customer, Actor, Transformation, Worldview (Weltanschauung), Owner, and Environment. The Environment element captures the external constraints and conditions that influence what the business system can do, regardless of internal preferences. The text illustrates “environment constraints” as factors outside day-to-day control that shape feasibility and behaviour (e.g., conditions that affect whether customers will buy in a particular way).

In this question, the stakeholder’s concern is about a potential change in government and the introduction of taxes on imported goods. This is not a “Transformation” (the conversion of inputs to outputs), nor is it a “Customer” definition. It also is not primarily a “Worldview,” which in the text is described as the stakeholder’s underlying belief system about why the organisation exists and how success is achieved. Instead, import taxes are an external political/legal constraint that would alter the economic assumptions of the business and could force a business model review.

This aligns squarely with the idea of external environmental influences described in the strategy analysis material (for example, political factors such as government policies and trade regulations/tariffs). Therefore, the stakeholder’s concern should be captured under Environment in CATWOE.