business-case

# Business Case Financial frameworks for investment justification and decision support. ## When to Use Each Framework | Framework | Use When | |-----------|----------| | **ROI** | Quick sanity check; time value of money doesn't matter much | | **NPV** | Multi-year investments; gold standard for GO/NO-GO | | **IRR** | Comparing projects competing for the same budget | | **Payback Period** | Leadership asks "how fast do we break even?" | | **TCO** | Build vs. buy; total cost including hidden/ongoing costs | | **Sensitivity Analysis** | High uncertainty; need to stress-test assumptions | ## Decision Tree ``` Is the investment multi-year? YES → Use NPV (+ IRR to compare alternatives) NO → ROI is sufficient Is this a build vs. buy decision? YES → TCO comparison across all three options NO → Skip TCO, use NPV/ROI Are assumptions uncertain? YES → Add sensitivity analysis (3 scenarios) NO → Base case only ``` ## Quick Reference Formulas ``` ROI = (Net Benefits - Total Costs) / Total Costs × 100% NPV = Sum(Cash Flow_t / (1 + r)^t) - Initial Investment r = discount rate (10% enterprise, 15-20% growth, 25-40% startup) Decision: Accept if NPV > 0 IRR = discount rate where NPV = 0 Decision: Accept if IRR > hurdle rate Payback Period = Initial Investment / Annual Cash Flow Benchmarks: SaaS 6-12 mo, Enterprise platform 12-24 mo, Infra 24-36 mo TCO = CAPEX + (OPEX × years) + Opportunity Cost + Hidden Costs ``` ## Business Case Template ```markdown # Busi...