PRINCE2F People: organizations, teams, and leadership Practice Question
This PRINCE2F practice question tests your understanding of people: organizations, teams, and leadership. The scenario asks you to isolate a root cause — eliminate options that address a different problem before choosing. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
A project is forecast to exceed its cost tolerance. What should the Project Manager do?
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 to the Project Board and await their direction
In PRINCE2, when a project is forecast to exceed its cost tolerance, the Project Manager must escalate the issue to the Project Board via an Exception Report. This is because the Project Manager does not have authority to exceed tolerances; the Project Board must decide whether to approve a revised Business Case, adjust tolerances, or terminate the project. Option C correctly follows the PRINCE2 principle of management by exception.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
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 immediately as the Business Case is no longer viable
Why it's wrong here
The Business Case may still be viable; the Board decides.
✗
Continue and report the cost overrun in the next Highlight Report
Why it's wrong here
Continuing without escalation violates management by exception.
✓
Raise an Exception Report to the Project Board and await their direction
Why this is correct
Escalation via Exception Report is the correct response.
Related concept
Read the scenario before looking for a memorised answer.
✗
Increase the project budget to absorb the additional cost
Why it's wrong here
The PM cannot unilaterally increase the budget; that requires Project Board approval.
Common exam traps
Common exam trap: answer the scenario, not the keyword
PeopleCert often tests the misconception that the Project Manager can handle tolerance breaches independently, but PRINCE2 strictly requires escalation to the Project Board via an Exception Report when any tolerance is forecast to be exceeded.
Detailed technical explanation
How to think about this question
The Exception Report is a formal PRINCE2 management product that details the deviation, its impact on the Business Case, and recommended options (e.g., revised tolerance, scope reduction, or project closure). The Project Board then issues an Exception Plan if they approve a path forward. In practice, this ensures that cost overruns are addressed at the correct governance level, preventing unauthorized budget changes that could undermine project control.
KKey Concepts to Remember
Read the scenario before looking for a memorised answer.
Find the constraint that changes the correct option.
Eliminate answers that are true in general but not in this case.
TExam Day Tips
→Watch for words such as best, first, most likely and least administrative effort.
→Review why wrong options are wrong, not only why the correct option is correct.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
How this comes up in practice
A small business has 20 workstations on the 192.168.1.0/24 network and one public IP from its ISP. The router uses PAT (NAT overload) so all 20 devices share one public address using different source ports. NAT questions test whether you understand the four address terms and which direction each translation applies.
What to study next
Got this wrong? Here's your next step.
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
People: organizations, teams, and leadership — This question tests People: organizations, teams, and leadership — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: Raise an Exception Report to the Project Board and await their direction — In PRINCE2, when a project is forecast to exceed its cost tolerance, the Project Manager must escalate the issue to the Project Board via an Exception Report. This is because the Project Manager does not have authority to exceed tolerances; the Project Board must decide whether to approve a revised Business Case, adjust tolerances, or terminate the project. Option C correctly follows the PRINCE2 principle of management by exception.
What should I do if I get this PRINCE2F question wrong?
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
What is the key concept behind this question?
Read the scenario before looking for a memorised answer.
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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.
Question Discussion
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