The following Business Case is constructed properly. "During 2009 the commercial loan division experienced a 2.7% default rate versus a target of less than .5%. This costs the bank in excess of…

Question

Options

• ATrue
• BFalse

• A
  76% (28)
• B
  24% (9)

Explanation

Option A (True) is correct because this business case is properly constructed - it includes a specific, measurable problem (2.7% default rate vs. a <0.5% target), a defined time period (2009), a clear organizational context (commercial loan division), and a quantified financial impact ($250,000+ quarterly). A well-formed business case must establish what the problem is, how big it is, and what it costs, and this statement does all three concisely.

Option B (False) is incorrect because there is no structural flaw in this business case - it avoids vague language, grounds the problem in data, and links it directly to business impact.

Memory tip: Remember the "3W rule" for business cases - What is the gap (2.7% vs. 0.5%), Where/When it occurred (commercial loan division, 2009), and Worth in dollars ($250K/quarter). If all three W's are present and specific, the business case is properly constructed.

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