APMG-International Better-Business-Cases-Practitioner Exam Practice Test Instant Access

Question 1

The Financial Appraisal for the new campus includes the cost of inflation over the life of the scheme.

Is this an appropriate application of the Five Case Model for the project?

ANo, because the Financial Appraisal should be based on constant prices.

BNo, because it is the Economic Appraisal that should include the cost of inflation.

CYes, because this will be an on going cost to the new campus over the life of the scheme.

DYes, because all of the new campus assets will decrease in value over the life of a scheme.

Answer : A

Question 2

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 the temporary accommodation on the site of the Old Fire Station Headquarters has been treated as a revenue cost within

the Financial Appraisal. This temporary accommodation is required as part of the construction of the new campus.

Is this an appropriate application of the Five Case Model for the project?

ANo, because the Financial Appraisal should NOT contain revenue costs.

BNo, because construction and refurbishment costs should be treated as capital costs.

CYes, because all construction costs must be accounted for.

DYes, because these represent a cost of developing the scheme.

Answer : B

Question 3

Which 2 observations correctly evaluate risks that could affect the affordability of this project?

AWithout the sale of Pittville High School, the project is no longer viable.

BThe project would still be viable if equipment costs were to double after Year 3.

CIf the other income were to be withdrawn for any reason, LEA Funding alone could fund the running costs of the scheme after Year 3.

DThe project would no longer be affordable if funding were to increase by 5%.

EIncome from the hire of the Sport Facilities must continue to increase every year for the scheme to be viable.

Answer : A, E

Question 4

Which 2 observations correctly evaluate the affordability of the Pittville project?

AThe Financial Appraisal shows that this scheme is unaffordable.

BAt the end of Year 6, E6 million of the initial spending costs will have been recovered.

CThe surplus Income forecast in Year 1 is sufficient to cover the deficit forecast in Year 2.

DThe revenue budget should show how long it will take for the surplus income to cover the initial cost of building the new campus.

EIf expenditure and income continue at the same rate, each subsequent year should return a surplus of 1 million.

Answer : C, E

Question 5

Which 2 observations correctly evaluate the Income?

AThere will be a funding gap in Year 2 when the Expenditure is forecast to exceed the Income.

BThe affordability of the scheme is NOT dependent upon the income from the sale of Pittville High School.

CIncome from the hire of the sports facilities should NOT be shown as a separate source of income.

DFunding to help pay for the construction of the new campus should be shown as a separate source of income in the Revenue Budget.

ELocal Education Authority (LEA) Funding should be moved to the Economic Appraisal.

Answer : A, B

Question 6

The Local Education Authority Director has been appointed as the Senior Responsible Owner for the Western Area Learning Improvement Programme.

Which action is MOST appropriate for this role?

AChampion the project when it gets into difficulties.

BConsider the downsizing of 11 to 18-year-old education and training provision elsewhere to offset the new campus.

CDocument the impact of the programme on the organization's income and expenditure account in the programme's business case.

DProvide assurance that the programme has delivered its anticipated benefits.

Answer : A

Question 7

The Consortium has appointed its own assurance on the Western Area Learning

Improvement Programme.

Which action should be completed by this role?

AEstablish the Pittville project spending objectives.

BConfirm the requirements for 16 to 18-year-old learners can be met.

CManage the risks retained by the public sector.

DArrange and schedule the resources required to develop the new learning campus.

Answer : B

APMG-International Better Business Cases Practitioner Exam Practice Test