CAPM Business Analysis Frameworks Practice Question
Which THREE of the following are typical components of a business case?
⚠ Common exam trap
CAPM often tests the distinction between pre-project documents (business case) and project authorization documents (project charter), so candidates who pick the charter as a business case component fall for the sequencing trap.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Alternative Analysis
A business case typically includes an Alternative Analysis (C), which compares viable options (e.g., build vs. buy vs. do nothing) against criteria such as cost, benefit, and feasibility to justify the recommended solution. It also includes a Financial Analysis (D), covering metrics like ROI, NPV, payback period, and cost-benefit analysis that quantify the investment's value. A Risk Assessment (E) is likewise a standard component, identifying potential risks, their probability and impact, and mitigation strategies that affect the decision. By contrast, the Project Charter (A) is a separate authorization document created after the business case is approved, and the Work Breakdown Structure (B) is a project-planning deliverable that decomposes scope into work packages, not a business case element.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Project Charter
Why it's wrong here
The project charter formally authorises the project and is issued after the business case is approved, so it cannot be a component of it. It is tempting because both documents precede execution; where the question asks for the document that authorises the project, the charter is correct.
- ✗
Work Breakdown Structure
Why it's wrong here
The work breakdown structure decomposes deliverables into work packages during planning; it is not part of the business case, which justifies the investment. It is tempting because it is a core project document, and in scope-planning activities it would be the expected output.
- ✓
Alternative Analysis
Why this is correct
A business case compares viable options to demonstrate the chosen approach delivers best value, so Alternative Analysis is a standard component. It records the options considered, their relative costs and benefits, and the rationale for selection, satisfying the stem's requirement for typical business case content.
- ✓
Financial Analysis
Why this is correct
Financial analysis quantifies costs, benefits, cash flows and expected return, such as ROI or payback period. This satisfies the stem's business case requirement by justifying the investment and supporting the go/no-go decision against alternative options.
- ✓
Risk Assessment
Why this is correct
A business case must evidence that the investment's return justifies its exposure, so documenting identified risks, their likelihood, impact and mitigation satisfies the appraisal requirement. Risk Assessment therefore sits alongside costs, benefits and options as a standard component of the business case.
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Written and reviewed by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
Last reviewed September 2026 · checked against the official PMI exam blueprint
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