PRINCE2F Practice Question: Overview of PRINCE2 and the project environment
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
When a tolerance is forecast to be exceeded, the Project Manager must escalate to the Project Board via an Exception Report.
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 and report in the next Highlight Report
Why it's wrong here
A forecast breach of stage cost tolerance is an exception requiring immediate escalation to the Project Board, not deferral. Highlight Reports are routine progress updates within tolerance; they cannot authorise corrective action. Continuing silently removes the Board's control point and breaches the tolerance-escalation principle.
- ✓
Raise an Exception Report to the Project Board
Why this is correct
Breaching stage cost tolerance exceeds the Project Manager's delegated authority, so the deviation must be escalated. An Exception Report informs the Project Board of the forecast breach, enabling it to decide on corrective action, satisfying the stem's requirement for handling tolerance exceedance.
- ✗
Close the project
Why it's wrong here
Closing the project is a Project Board decision taken only when the Business Case no longer justifies continuation, not an automatic response to a cost forecast. The Project Manager must escalate the exception; premature closure discards a project that may still deliver viable benefits.
- ✗
Increase the stage budget and continue
Why it's wrong here
The Project Manager cannot unilaterally raise a stage budget; tolerances are set and changed only by the Project Board. Increasing the budget bypasses the exception process entirely. Escalating the forecast breach for a Board decision is the required action.
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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.