IF ELSE vs CASE WHEN

You have not created any function with a name dbo.myfunc(). Create the function, it will resolve your error.

create FUNCTION dbo.myfunc()
RETURNS int 
AS 
BEGIN
       RETURN 100
END;

select case when exists(select name from sysobjects where name = 'myfunc') then dbo.myfunc() else 0 end;

-Prashanth