Free APMG-International Better-Business-Cases-Practitioner Practice Exam with Questions & Answers | Set: 3

Here are the appropriate options for each line based on the assertions and reasons provided:

Option C: True (Assertion) / False (Reason) - It is appropriate that the contract includes price variations dependent on the LEA's ability to downsize. However, the reason given is false because a Commercial Case outlines how payments will be made but does not necessarily include contract price variations based on downsizing capacity.

Option E: False (Assertion) / False (Reason) - The assertion is false because the duration of a construction contract usually does not cover the lifetime of the asset; it covers the period of the construction. The reason is also false because a Commercial Case explains the delivery timescales, not necessarily the duration covering the asset's lifetime.

Option A: True (Assertion) / True (Reason) - It is true that the source of funding should be described in the Commercial Case, and the reason is true because the Commercial Case does explain the financial implications to an organization of a negotiated deal.

Option E: False (Assertion) / False (Reason) - The assertion is false; while it is important to identify and cost individual risks, encouraging a service provider to take on risks is not the primary function of the Commercial Case. The reason is also false because optimizing the transfer of risk is not the sole purpose of a Commercial Case; it's about outlining the commercial viability and arrangements.

Option A: True (Assertion) / True (Reason) - It is true that the chosen service provider for the construction should agree to the procurement strategy, and the reason is true because a Commercial Case involves agreeing to the commercial transaction and procurement strategy.

Option A: True (Assertion) / True (Reason) - It is true that the Commercial Case should explain the staff redistribution and redundancies as these are key elements of the commercial terms and conditions of the project which will affect the financial and commercial implications of the scheme.

The additional on-going cost of electricity for the Pittville University development should be included in the Economic Appraisal as it represents aC. Variable cost. This is because the cost of electricity will vary depending on the level of usage, which is likely to fluctuate with the operational activities of the university development.

The money spent to date on the Old Fire Station Headquarters site feasibility study and legal advice should be included in the Economic Appraisal as aB. Fixed cost. These are costs that have already been incurred and will not change regardless of the scale of the project moving forward.

The cost of a stand-alone technology cabin with a separate contract for specialist call-out support, paid on an as-needed basis, should be included as aD. Semi-variable cost. The base cost of the cabin is fixed, but the call-out support costs will vary depending on the frequency of the need for specialist support.

The Highways Department's upgrade of the access road to the Old Fire Station Headquarters site, even though it will not count against the Pittville project budget, should still be considered in the Economic Appraisal to understand the full economic impact of the project. However, since it does not impact the project budget directly, it could be argued that it isA. NOT included in the Economic Appraisalfrom the project's budget perspective but might be acknowledged in a broader economic impact analysis.

The use of the Old Fire Station Headquarters site, which is owned by the Council and was to be sold but will now be used for the new campus, represents an opportunity cost but not a direct financial cost to the project. Therefore, it might beA. NOT included in the Economic Appraisalas a direct cost but could be considered in terms of forgone revenue or alternative use value in a broader economic analysis.

The need to expand the car park at Pittville University if over 1,500 students attend represents aE. Step cost. This cost will not occur until a certain threshold (in this case, student numbers) is reached, at which point it will increase in a step-like manner.