- A
Increase the project budget to absorb the additional cost and continue with the current Stage Plan
Why wrong: The Project Manager cannot unilaterally increase the budget; this requires Project Board approval.
- B
Raise an Exception Report to the Project Board and await their direction
When tolerance is forecast to be exceeded, the PM must escalate via an Exception Report.
- C
Close the project immediately as the Business Case is no longer viable
Why wrong: A cost tolerance breach does not automatically mean the Business Case is unviable; the Project Board decides.
- D
Continue with the current Stage Plan and report the cost overrun in the next Highlight Report
Why wrong: Continuing without escalation violates management by exception; the PM must escalate immediately.
PRINCE2F PRINCE2 Practices Practice Question
This PRINCE2F practice question tests your understanding of prince2 practices. 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 cost tolerance for the current stage. According to PRINCE2, 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 and await their direction
According to PRINCE2, when a stage is forecast to exceed its cost tolerance, the Project Manager must escalate the issue to the Project Board by raising an Exception Report. This triggers a formal decision process where the Board can authorize a revised Stage Plan or take other corrective action. Continuing without escalation violates the management by exception principle.
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.
- ✗
Increase the project budget to absorb the additional cost and continue with the current Stage Plan
Why it's wrong here
The Project Manager cannot unilaterally increase the budget; this requires Project Board approval.
- ✓
Raise an Exception Report to the Project Board and await their direction
Why this is correct
When tolerance is forecast to be exceeded, the PM must escalate via an Exception Report.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
Close the project immediately as the Business Case is no longer viable
Why it's wrong here
A cost tolerance breach does not automatically mean the Business Case is unviable; the Project Board decides.
- ✗
Continue with the current Stage Plan and report the cost overrun in the next Highlight Report
Why it's wrong here
Continuing without escalation violates management by exception; the PM must escalate immediately.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates assume cost overruns can be handled within the Project Manager's authority or that the Business Case is automatically invalid, when PRINCE2 mandates escalation to the Project Board for any forecast tolerance breach.
Detailed technical explanation
How to think about this question
The Exception Report must include the cause of the deviation, options for recovery, and the impact on the Business Case. The Project Board then decides whether to approve a revised Stage Plan, adjust the project's overall tolerance, or prematurely close the project. This mechanism ensures that cost overruns are managed at the correct governance level, preventing unauthorized scope creep or budget misuse.
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
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FAQ
Questions learners often ask
What does this PRINCE2F question test?
PRINCE2 Practices — This question tests PRINCE2 Practices — 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 — According to PRINCE2, when a stage is forecast to exceed its cost tolerance, the Project Manager must escalate the issue to the Project Board by raising an Exception Report. This triggers a formal decision process where the Board can authorize a revised Stage Plan or take other corrective action. Continuing without escalation violates the management by exception principle.
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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Last reviewed: Jul 4, 2026
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.
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