PRINCE2F People: organizations, teams, and leadership Practice Question

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

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 to the Project Board

Escalation via Exception Report is required when a tolerance is forecast to be exceeded.

Answer analysis

For each option: why learners choose it and why it is or isn't the right answer here.

✓
Raise an Exception Report to the Project Board
Why this is correct
When a forecast indicates that stage cost tolerance will be exceeded, the Project Manager must escalate this deviation to the Project Board by raising an Exception Report. This mechanism satisfies the PRINCE2 principle of management by exception, as the stage tolerance has been breached and the Project Manager no longer has authority to continue without seeking a decision.
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Increase the budget and continue
Why it's wrong here
The PM cannot increase budget without Project Board approval.
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Close the project immediately
Why it's wrong here
Closing is not the correct response; the Board decides.
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Continue and report in the next Highlight Report
Why it's wrong here
Immediate escalation is required, not reporting later.

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