According to the PMBOK® Guide and the Standard for Project Management, the Business Case is the primary economic feasibility study used to establish the validity of the benefits of a selected component which is used as a basis for the authorization of further project management activities.
The Business Case describes the necessary information from a business standpoint to determine whether the expected outcomes of the project justify the required investment. It typically includes:
Business Need: The reason why the project is being undertaken (e.g., market demand, legal requirement, or organizational need).
Analysis of the Situation: Identifying organizational goals, strategies, and objectives.
Recommendation: A statement of the recommended solution.
Evaluation: A statement describing the plan for measuring the benefits the project will deliver.
The other options are incorrect based on the following PMI definitions:
Cost Baseline: This is the approved version of the time-phased project budget, excluding any management reserves, which can be changed only through formal change control procedures. It is used as a basis for comparison to actual results.
Service Level Agreement (SLA): A contract between a service provider and a customer that defines the level of service expected. It is a functional document rather than a feasibility document.
Memorandum of Understanding (MOU): This is an agreement between two or more parties outlined in a formal document. It is not a financial justification document for investment.
As per the PMI Standard for Portfolio Management, the Business Case is a key input to the Develop Project Charter process, ensuring that the project aligns with the organization ' s strategic goals and financial capabilities.
