PRINCE2F PRINCE2 Practices Practice Question
A project is forecast to exceed its cost tolerance. What should the Project Manager do?
⚠ Common exam trap
Test-takers frequently confuse the Project Manager's authority to manage within tolerances with the ability to handle breaches, leading them to choose 'continue and report later' (D) or 'use change budget' (B), when PRINCE2 mandates immediate escalation via an Exception Report.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Raise an Exception Report and await Project Board direction.
C is correct because when a project forecasts exceeding its cost tolerance, the Project Manager must escalate the issue to the Project Board via an Exception Report. This is a PRINCE2 management by exception principle: tolerances are delegated limits, and exceeding them requires board-level decision-making, not unilateral action by the Project Manager.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Close the project as the Business Case is no longer viable.
Why it's wrong here
A cost overrun does not automatically mean the Business Case is unviable.
- ✗
Increase the project budget using the change budget.
Why it's wrong here
The Project Manager cannot increase the budget without Project Board approval.
- ✓
Raise an Exception Report and await Project Board direction.
Why this is correct
The Project Manager must escalate via an Exception Report.
- ✗
Continue with the plan and report the overrun in the next Highlight Report.
Why it's wrong here
Continuing without escalation violates management by exception.
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Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
This PRINCE2F practice question is part of Courseiva's free PeopleCert certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the PRINCE2F exam.