Final answer:
The claim that a business case for an IT project does not need to address risk is false. Risk assessment is critical in the business case and it requires thorough consideration beyond just incorporating it into the discount rate.
Step-by-step explanation:
The statement that a business case for an IT project does not need to address risk is false. In fact, risk assessment is a critical component of any business case. It is not sufficient to only incorporate risk into the discount rate because the discount rate does not account for all types of risk such as default risk and interest rate risk. Moreover, risks may have non-financial impacts that are important for decision-making. For instance, a project might have a potential for high financial return but could carry significant operational or reputational risks that could jeopardize the entire business.
Understanding the expected rate of return of a project is essential, but it must be considered alongside the risks involved since these risks can cause the actual rate of return to deviate significantly from the expected outcome. Therefore, it is crucial for any business or investment case to thoroughly assess and plan for potential risks, and this is especially true for IT projects which can be complex and have wide-ranging impacts within an organization.