The correct action when a PRINCE2 business case tolerance is breached is to recommend closure of the project because the business case is no longer viable. This is the right choice because PRINCE2 is built on the principle of continued business justification, meaning the project must remain worthwhile throughout its lifecycle. Here, the project has consumed 95% of the budget while delivering only 40% of the scope, which clearly exceeds the agreed cost tolerance of +/-10% and makes the original benefits unachievable. On the PRINCE2 Foundation exam, this scenario tests your understanding that exceeding tolerance does not automatically mean escalation for a fix—it signals that the business case itself is broken, and the project manager must advise the project board to close the project to prevent further waste. A common trap is thinking the board should simply re-plan or request more budget, but PRINCE2 demands closure when the costs outweigh the benefits. Remember the memory tip: “95% spent, 40% done—tolerance breached, business case gone.”
PRINCE2F Practice Question: Overview of PRINCE2 and the project environment
This PRINCE2F practice question tests your understanding of overview of prince2 and the project environment. Read the scenario carefully and evaluate each option against the stated constraints before committing to an answer. 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 manager is reviewing a project that has been running for three months. The business case was approved with a cost tolerance of +/- 10%. The project has already spent 95% of the budget but has only completed 40% of the scope. The project board is meeting to decide the project's fate. The project manager should advise the board to:
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Recommend closure of the project because the business case is no longer viable
Option C is correct because the project has consumed 95% of the budget while delivering only 40% of the scope, making the original business case no longer viable. PRINCE2 requires continuous business justification; if the costs outweigh the benefits, the project should be closed. The project manager must advise the board to close the project as continuing would waste further resources.
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.
✗
Request a budget increase and complete the project
Why it's wrong here
The budget overrun is too severe; a simple increase does not address the poor cost performance.
✗
Continue as planned but monitor costs more tightly
Why it's wrong here
The project is not viable; continuing ignores the fundamental issue.
✓
Recommend closure of the project because the business case is no longer viable
Why this is correct
PRINCE2 requires ongoing business case validation; if the project cannot deliver benefits within tolerance, closure is appropriate.
Related concept
Read the scenario before looking for a memorised answer.
✗
Proceed with an exception plan without board approval
Common exam trap: answer the scenario, not the keyword
PeopleCert often tests the misconception that a project can be saved by simply requesting more budget or monitoring costs, but PRINCE2 demands that the business case be re-evaluated when tolerance is breached, and if it is no longer viable, the project must be closed.
Detailed technical explanation
How to think about this question
Under PRINCE2, the business case is the key document for continued justification; if the projected costs exceed the agreed tolerance (here +/-10%), the project is in exception and must be escalated to the board. The board then decides whether to approve an exception plan (which includes revised costs and schedule) or close the project. In this scenario, the 55% gap between spend and completion indicates the original business case is fundamentally broken, making closure the only viable option.
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.
Overview of PRINCE2 and the project environment — This question tests Overview of PRINCE2 and the project environment — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: Recommend closure of the project because the business case is no longer viable — Option C is correct because the project has consumed 95% of the budget while delivering only 40% of the scope, making the original business case no longer viable. PRINCE2 requires continuous business justification; if the costs outweigh the benefits, the project should be closed. The project manager must advise the board to close the project as continuing would waste further resources.
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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