TOPIC: Free CAPM® Exam Sample Question

The document that describes the necessary information from a business standpoint to determine whether a project is worth investing in is the:

A. Business case
B. Business need
C. Strategic plan
D. Business requirements

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HINT: Which document includes a cost-benefit analysis?

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Answer and Explanation:
The correct answer is A.

The business case includes a cost-benefit analysis to determine whether a project is worth an investment, or not. It is a primary input for developing the project charter.

Details for each option:

A. Business case
Correct. The purpose of the business case is to justify the project with consideration of the required investment and the gained benefit to decide whether the project should be initiated.

B. Business need
Incorrect. An organization's business need may come from market demand, legal requirements, or technological advance, etc. Business need alone cannot be used to justify the project. Typically, a cost-benefit analysis is used to decide whether to initiate a project.

C. Strategic plan
Incorrect. The strategic plan includes the organization's strategic vision, goals, and objectives that all projects should be aligned with.

D. Business requirements
Incorrect. The business requirements are part of the project requirements, which describe the high-level needs of the organization as the reason, why the project is undertaken.

Reference: A Guide to the Project Management Body of Knowledge, (PMBOK^® Guide) – Sixth Edition, Project Management Institute Inc., 2017, Page(s) 29