PRINCE2F PRINCE2 Practices Practice Question
A project manager is preparing the Business Case for a new project. The expected benefits are $500,000, and the expected costs are $400,000. However, there is a high risk that the benefits may be only $300,000 due to market uncertainty. According to PRINCE2 practices, how should the project manager reflect this in the Business Case?
⚠ Common exam trap
Many exam-takers choose a single 'conservative' estimate (Option B) thinking it is prudent, but PRINCE2 requires transparency through a range and risk assessment rather than hiding uncertainty or oversimplifying the analysis.
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
✓
Include a cost-benefit analysis showing a range of benefits ($300,000-$500,000) and a risk assessment explaining the market uncertainty.
PRINCE2 requires the Business Case to be a living document that reflects realistic projections, including uncertainties. By showing a range of benefits ($300,000–$500,000) and a corresponding risk assessment, the project manager provides a balanced view that supports informed decision-making, aligning with the 'continued business justification' principle.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✓
Include a cost-benefit analysis showing a range of benefits ($300,000-$500,000) and a risk assessment explaining the market uncertainty.
Why this is correct
PRINCE2 requires the Business Case to present benefits and dis-benefits alongside associated risks and their impact. Showing a benefit range of $300,000-$500,000 with a risk assessment captures the market uncertainty, satisfying the practice of justifying continued viability.
- ✗
Use the lower benefit estimate of $300,000 to be conservative.
Why it's wrong here
Adopting the pessimistic $300,000 figure alone hides the range of possible outcomes and overstates certainty; PRINCE2 expects the Business Case to present expected benefits with their uncertainty, for example through a range, sensitivity analysis, or risk-adjusted value. Conservative single-point estimates suit simple, low-uncertainty cases.
- ✗
Use the expected benefits of $500,000 as the primary figure, with a note that benefits may vary.
Why it's wrong here
PRINCE2 requires the Business Case to present risk-adjusted costs and benefits, so quoting $500,000 as the primary figure overstates the case; the $300,000 downside must drive the forecast. It tempts because optimistic headline figures secure approval, but that suits low-uncertainty scenarios where variance is immaterial.
- ✗
Omit the risk from the Business Case to avoid discouraging stakeholders.
Why it's wrong here
PRINCE2 mandates that the Business Case record risks and their impact on the justification, so omitting the downside conceals the risk-adjusted case from the Project Board. It tempts because simplifying stakeholder messaging feels protective, yet a Business Case exists precisely to expose viability threats, not suppress them.
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