PRINCE2F Overview of PRINCE2 and the project environment Practice Test 1 — 15 Questions

Question 1

A project manager is assigned to a new project. The project's business case has been approved, and the project board has authorized the initiation stage. According to PRINCE2, what is the first step the project manager should take?

Accepted Answer

Create the Project Plan. In PRINCE2, once the business case is approved and the initiation stage is authorized, the project manager's first step is to create the Project Plan. This is because the Project Plan provides the detailed schedule, costs, and resource allocations needed to manage the initiation stage effectively, and it is a mandatory management product for the Initiating a Project process. Without the Project Plan, the project manager cannot proceed with other activities like updating the Risk Register or reviewing the Business Case in a structured way.

Answer

Update the Risk Register

Answer

Appoint the project board

Answer

Review the Business Case

Question 2

A project is in the initiation stage. The project manager identifies that the project's objectives are not aligned with the corporate strategy. Which management product should the project manager review to address this issue?

Accepted Answer

Project Brief. The Project Brief is the correct management product to review because it contains the high-level project definition, including the project objectives and how they align with corporate strategy. During the initiation stage, if the objectives are misaligned, the Project Brief provides the basis for reassessing the project's justification and strategic fit before proceeding further.

Answer

Risk Register

Answer

Business Case

Answer

Project Plan

Question 3

A project is initiated in a highly regulated environment where external auditors will review compliance. The project manager is concerned about maintaining clear evidence of decisions. Which PRINCE2 principle is most important to apply in this situation?

Accepted Answer

Manage by stages. Manage by stages is the most important principle because it requires the project to be planned, monitored, and controlled in discrete stages, with each stage authorizing the next only after a formal review. In a highly regulated environment, this creates clear, auditable decision points (e.g., stage boundary approvals) that external auditors can trace. The project manager can document stage plans, exception reports, and end-stage assessments as explicit evidence of governance.

Answer

Continued business justification

Answer

Tailor to suit the project environment

Answer

Learn from experience

Question 4

Which TWO of the following are aspects of project performance that PRINCE2 considers?

Accepted Answer

Risk. PRINCE2 defines six aspects of project performance that must be managed: Costs, Time, Quality, Scope, Risk, and Benefits. Risk (Option B) and Time (Option C) are explicitly included in this set. These aspects are used to measure and control project success throughout the lifecycle.

Answer

Resources

Answer

Value

Answer

Customer satisfaction

Question 5

Refer to the exhibit. The project manager needs to get approval to proceed with the initiation stage. Who is responsible for authorizing the initiation stage?

Accepted Answer

Executive. The Executive is the single person accountable for the project and has the authority to authorize the initiation stage. According to PRINCE2, only the Executive can give the approval to proceed from the Starting Up a Project process to the Initiation Stage, as they own the business case and are responsible for the project's overall justification.

Answer

Senior User

Answer

Project Manager

Answer

Team Manager

Question 6

You are the project manager for a large-scale IT infrastructure project in a multinational corporation. The project has completed its initiation stage and is about to start the first delivery stage. The project board has approved the project plan and the business case. However, during the initiation stage, the team encountered significant issues with resource availability due to a company-wide reorganization. Several key team members have been reassigned to other projects, and the project's budget has been reduced by 15%. The project board has asked you to proceed with the first delivery stage as planned. As a PRINCE2 practitioner, what is the most appropriate course of action?

Accepted Answer

Inform the project board that the stage cannot proceed as planned and request a review of the project plan and business case.. A is correct because PRINCE2 requires that the project remains viable against its business case and plans before proceeding to the next stage. The significant resource reassignments and 15% budget reduction fundamentally alter the project's baseline, making the approved project plan and business case invalid. The project manager must escalate this to the project board for a formal review and re-approval, as proceeding without addressing these changes violates the 'continued business justification' principle.

Answer

Update the risk register with the resource and budget issues and proceed with the stage as planned.

Answer

Proceed with the first delivery stage using the existing approved plans, but closely monitor resource usage.

Answer

Adjust the project plan and resource allocations to fit the new budget and proceed without further authorization.

Question 7

A project manager is reviewing a project that has been running for three months. The business case was approved with a cost tolerance of +/- 10%. The project has already spent 95% of the budget but has only completed 40% of the scope. The project board is meeting to decide the project's fate. The project manager should advise the board to:

Accepted Answer

Recommend closure of the project because the business case is no longer viable. Option C is correct because the project has consumed 95% of the budget while delivering only 40% of the scope, making the original business case no longer viable. PRINCE2 requires continuous business justification; if the costs outweigh the benefits, the project should be closed. The project manager must advise the board to close the project as continuing would waste further resources.

Answer

Request a budget increase and complete the project

Answer

Continue as planned but monitor costs more tightly

Answer

Proceed with an exception plan without board approval

Question 8

A project in a highly regulated industry must comply with external legal requirements. The project manager is concerned that changes in regulations during the project could affect the project's viability. According to PRINCE2, which management product should be updated to reflect the impact of regulatory changes?

Accepted Answer

Business case. The Business Case is the correct management product because it documents the justification for the project, including costs, benefits, and risks. A change in external regulations directly impacts the project's viability, which is a fundamental aspect of the Business Case. PRINCE2 requires the Business Case to be updated whenever there is a change that could affect the project's continued justification.

Answer

Issue register

Answer

Project plan

Answer

Risk register

Question 9

A project is being initiated in a dynamic environment where requirements are expected to change frequently. The project manager is considering how to tailor PRINCE2 to this environment. Which PRINCE2 principle is most important to emphasize in this context?

Accepted Answer

Manage by stages. In a dynamic environment with frequent requirement changes, the 'Manage by Stages' principle is most important because it allows the project to be broken into manageable chunks. At the end of each stage, the project board can reassess the business justification and decide whether to continue, providing the flexibility to adapt to changes without committing all resources upfront.

Answer

Continued business justification

Answer

Focus on products

Answer

Tailor to suit the project environment

Question 10

Drag and drop the steps to manage a risk in PRINCE2 into the correct order.

Question 11

Which of the following is a characteristic of a project?

Accepted Answer

Temporary, unique output, cross-functional. Projects are temporary, produce a unique output, and require cross-functional teams.

Answer

Permanent and routine

Answer

Produces the same output repeatedly

Answer

Ongoing and repetitive

Question 12

Who is responsible for maintaining the Business Case throughout the project?

Accepted Answer

Executive. The Executive (Senior Responsible Owner) owns the Business Case and is responsible for its maintenance.

Answer

Project Manager

Answer

Senior User

Answer

Senior Supplier

Question 13

Which document is the key output of the Initiating a Project process?

Accepted Answer

Project Initiation Documentation. The Project Initiation Documentation (PID) is the key output of Initiating a Project.

Answer

Project Plan

Answer

Project Brief

Answer

Business Case

Question 14

A project is forecast to exceed its cost tolerance. What should the Project Manager do?

Accepted Answer

Raise an Exception Report. The PM must escalate via an Exception Report to the Project Board.

Answer

Close the project

Answer

Continue and report later

Answer

Increase the project budget