Answer the following question about the Economic Case within the Outline Business Case(OBC).

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Answer the following question about the Economic Case within the Outline Business Case

(OBC).

The Preferred Way Forward is the Service Solution to provide a new Learning Campus on the

Old Fire Station Headquarters site and to close and transfer all further education units in the

Pittville area. However there are concerns that the project timescale may be difficult to keep

due to the following reasons:

. Planning authority consent may delay the schedule because the site is in a conservation

area

. Staff and students could be opposed to moving location.

Lines 1 to 5 in the table below consist of an assertion statement and a reason statement. For each

line identify the appropriate option, from options A to E, that applies. Each option can be used once,

more than once or not at all.

Explanation:

The assertion is that the conversion of the Old Fire Station Headquarters site should be considered as a non-standard building project for deriving the optimism bias adjustment factor because non-standard building projects involve significant planning and construction risks. This isTrue, and the reason given is alsoTrueand explains the assertion because the presence of significant risks is precisely why it would be categorized as non-standard and why an optimism bias adjustment would be needed.

Correct Option: A

The assertion states that the optimism bias should be set midway between the upper and lower works duration limit to reflect the identified timescale risks becauseoptimism bias should be reduced as each risk is mitigated. This isTrue; however, the reason isTruebut does not correctly explain the assertion. Optimism bias is related to underestimation of risks, not their mitigation.

Correct Option: B

The assertion here is that opposition of staff and students to the move should be categorized as a decant risk because a decant risk arises in accommodation projects related to moving staff and clients. This isTrue, and the reason isTrueand directly explains why such opposition should be considered a decant risk.

Correct Option: A

The assertion that risks to the timetable should be used as the basis for scenario analysis isTrue. The reason given is that sensitivity analysis of Economic Appraisal findings should identify reasons for variances in project assumptions and estimates, which is alsoTrueand provides a correct explanation for using risks in scenario analysis.

Correct Option: A

The final assertion is that the preferred option must consider developing on the Pittville University site to manage all 16-18 education because it has the highest net present social value. This assertion isFalsebecause the preferred option should be the one with the best value for money overall, considering both quantitative and qualitative benefits. The reason is alsoFalsebecause it incorrectly suggests that the option with the highest net present social value automatically demonstrates the best value for money, without consideration of costs or other factors.

Correct Option: E

Therefore, the correct options for each line are A, B, A, A, and E, respectively

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