This PRINCE2F practice question tests your understanding of prince2 processes. 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 stage 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
Option D is correct because PRINCE2 mandates that when a project manager forecasts a deviation beyond the stage tolerance, they must escalate the issue to the Project Board via an Exception Report. The Project Board then decides whether to approve an exception plan, adjust tolerance, or close the project. This ensures governance and control over the project's budget and scope.
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.
✗
Continue with the current Stage Plan and report the overrun in the next Highlight Report
Why it's wrong here
Escalation must happen immediately, not wait for the next Highlight Report.
✗
Increase the project budget and continue with the current Stage Plan
Why it's wrong here
The Project Manager cannot increase the budget without authorization.
✗
Close the project as the Business Case is no longer viable
Why it's wrong here
A single stage tolerance breach does not necessarily invalidate the Business Case.
✓
Raise an Exception Report to the Project Board and await their direction
Why this is correct
Correct: management by exception requires escalation when tolerances are forecast to be exceeded.
Related concept
Read the scenario before looking for a memorised answer.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates may think the Project Manager can simply adjust the budget or continue reporting later, but PRINCE2 strictly requires immediate escalation via an Exception Report when tolerance is forecast to be exceeded, emphasizing the principle of management by exception.
Detailed technical explanation
How to think about this question
In PRINCE2, tolerance is a key mechanism for delegating authority; the Project Manager manages within stage tolerance, and the Project Board manages within project tolerance. When a forecasted deviation exceeds stage tolerance, the Project Manager must raise an Exception Report, which includes options for corrective action, and then implement the Project Board's decision, which may involve approving an exception plan that revises the stage plan or project plan. This process ensures that the Project Board retains control over significant deviations and that the Business Case remains viable.
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 practitioner preparing for the PRINCE2F exam encounters this exact type of scenario on the job. The correct answer here is not the most general option — it is the best answer for the specific constraint described. Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option. Real exam questions reward reading the full scenario before eliminating options, because the constraint defines which answer fits.
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.
PRINCE2 Processes — This question tests PRINCE2 Processes — 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 — Option D is correct because PRINCE2 mandates that when a project manager forecasts a deviation beyond the stage tolerance, they must escalate the issue to the Project Board via an Exception Report. The Project Board then decides whether to approve an exception plan, adjust tolerance, or close the project. This ensures governance and control over the project's budget and scope.
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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Question Discussion
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