- A
Raise an Exception Report to the Project Board and await their direction before proceeding
When a stage tolerance is forecast to be exceeded, the Project Manager must escalate to the Project Board immediately via an Exception Report. This is management by exception.
- B
Continue with the current Stage Plan and report the cost overrun in the next Highlight Report
Why wrong: Continuing without escalation when a tolerance is forecast to be exceeded violates PRINCE2's management by exception principle.
- C
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 project budget. Changes to project-level tolerances require Project Board authorisation.
- D
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 must assess the situation and decide whether to continue, change direction, or close.
What to Do When a PRINCE2 Cost Tolerance Is Forecast to Be Exceeded
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.
During the Controlling a Stage process, the Project Manager identifies that the project is forecast to exceed the agreed cost tolerance for the current stage. 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 before proceeding
Option A is correct. When a stage tolerance is forecast to be exceeded, the Project Manager must escalate to the Project Board immediately via an Exception Report — this is PRINCE2's management by exception principle. The Project Manager cannot unilaterally exceed tolerances (C), continue without escalation (B), or close the project without Board decision (D).
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.
- ✓
Raise an Exception Report to the Project Board and await their direction before proceeding
Why this is correct
When a stage tolerance is forecast to be exceeded, the Project Manager must escalate to the Project Board immediately via an Exception Report. This is management by exception.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
Continue with the current Stage Plan and report the cost overrun in the next Highlight Report
Why it's wrong here
Continuing without escalation when a tolerance is forecast to be exceeded violates PRINCE2's management by exception principle.
- ✗
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 project budget. Changes to project-level tolerances require Project Board authorisation.
- ✗
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 must assess the situation and decide whether to continue, change direction, or close.
Common exam traps
Common exam trap: answer the scenario, not the keyword
Many certification questions include familiar terms but test a specific constraint. Read the exact wording before choosing an answer that is generally true but wrong for this case.
Trap categories for this question
Scenario analysis trap
A cost tolerance breach does not automatically mean the Business Case is unviable. The Project Board must assess the situation and decide whether to continue, change direction, or close.
Detailed technical explanation
How to think about this question
This question should be treated as a scenario, not a definition check. Identify the problem, the constraint and the best action. Then compare each option against those facts.
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.
- Use explanations to understand the rule behind the answer.
TExam Day Tips
- Underline the problem statement mentally.
- 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 PRINCE2F exam domain this question belongs to, then review the specific concept being tested. Practise related questions in that domain and focus on understanding why each wrong answer is tempting — not just why the correct answer is right.
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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 before proceeding — Option A is correct. When a stage tolerance is forecast to be exceeded, the Project Manager must escalate to the Project Board immediately via an Exception Report — this is PRINCE2's management by exception principle. The Project Manager cannot unilaterally exceed tolerances (C), continue without escalation (B), or close the project without Board decision (D).
What should I do if I get this PRINCE2F question wrong?
Identify which PRINCE2F exam domain this question belongs to, then review the specific concept being tested. Practise related questions in that domain and focus on understanding why each wrong answer is tempting — not just why the correct answer is right.
What is the key concept behind this question?
Read the scenario before looking for a memorised answer.
About these practice questions
Courseiva creates original exam-style practice questions with explanations and wrong-answer analysis. It does not publish real exam questions, exam dumps, or protected exam content. Learn why practice questions differ from exam dumps →
Same concept, more angles
8 more ways this is tested on PRINCE2F
These questions test the same concept from different angles. Work through them to make sure you can recognise it however the exam phrases it.
Variation 1. During the Controlling a Stage process, the Project Manager identifies that the stage's cost tolerance is forecast to be exceeded. According to PRINCE2, what should the Project Manager do?
medium- A.Increase the stage budget using the change budget and continue with the current Stage Plan
- B.Close the project immediately as the Business Case is no longer viable
- ✓ C.Raise an Exception Report to the Project Board and await their direction before proceeding
- D.Continue with the current Stage Plan and report the cost overrun in the next Highlight Report
Why C: According to PRINCE2, when a stage's cost tolerance is forecast to be exceeded, the Project Manager must escalate the issue to the Project Board by raising an Exception Report. This is because the Project Manager does not have authority to exceed the agreed tolerance; the Project Board must decide whether to approve a revised Stage Plan or take other corrective action. Continuing without escalation or making unauthorized adjustments violates the management by exception principle.
Variation 2. During the Controlling a Stage process, the Project Manager identifies that the project is forecast to exceed the agreed cost tolerance for the current stage. What should the Project Manager do?
medium- A.Increase the project budget to absorb the additional cost and continue with the current Stage Plan
- B.Close the project immediately as the Business Case is no longer viable
- C.Continue with the current Stage Plan and report the cost overrun in the next Highlight Report
- ✓ D.Raise an Exception Report to the Project Board and await their direction before proceeding
Why D: Option D is correct. When a tolerance is forecast to be exceeded, the Project Manager must escalate to the Project Board via an Exception Report — this is PRINCE2's management by exception principle. The Project Manager cannot unilaterally decide to exceed tolerances; that requires Project Board authorisation. Option A is wrong because the PM cannot increase the budget without Project Board approval. Option B is wrong because closing the project is not the appropriate response to a stage tolerance breach; the Project Board may decide to close if the Business Case is no longer viable. Option C is wrong because continuing without escalation violates management by exception.
Variation 3. A project is forecast to exceed its cost tolerance at the project level. What should the Project Manager do?
medium- A.Update the Business Case to reflect the new costs
- ✓ B.Raise an Exception Report to the Project Board
- C.Continue as planned and inform the Project Board in the next Highlight Report
- D.Use the risk budget to cover the extra cost
Why B: When project-level tolerance is forecast to be exceeded, the Project Manager must escalate to the Project Board via an Exception Report.
Variation 4. A project is forecast to exceed its cost tolerance at stage level. What should the Project Manager do first?
medium- A.Increase the stage budget and continue
- B.Close the project as the Business Case is not viable
- ✓ C.Raise an Exception Report to the Project Board
- D.Wait until the next Highlight Report
Why C: In PRINCE2, when a project forecasts exceeding its stage-level cost tolerance, the Project Manager must first escalate the issue to the Project Board by raising an Exception Report. This is because the Project Manager does not have authority to exceed the delegated tolerance; the Project Board must decide on corrective action, such as approving a revised plan or closing the project. Option C is correct as it aligns with the PRINCE2 principle of management by exception.
Variation 5. A project is forecast to exceed its cost tolerance. What should the Project Manager do?
hard- A.Close the project immediately as the Business Case is no longer viable
- B.Continue with the current plan and report the cost overrun in the next Highlight Report
- ✓ C.Raise an Exception Report to the Project Board and await their direction
- D.Increase the budget to absorb the additional cost and continue with the current plan
Why C: In PRINCE2, when a project is forecast to exceed its cost tolerance, the Project Manager must escalate the issue to the Project Board by raising an Exception Report. This is because tolerances are delegated limits, and exceeding them requires a decision from the Project Board to either approve a deviation, change the plan, or take corrective action. Continuing without escalation violates the management by exception principle.
Variation 6. A project is forecast to exceed its cost tolerance. What should the Project Manager do?
hard- A.Close the project as the Business Case is no longer viable
- B.Continue with the current Plan and report in the next Highlight Report
- C.Increase the project budget to absorb the additional cost
- ✓ D.Raise an Exception Report to the Project Board
Why D: When a forecast indicates that a stage or project tolerance will be exceeded, the Project Manager must escalate via an Exception Report to the Project Board. This is management by exception.
Variation 7. A project is forecast to exceed its cost tolerance. What should the Project Manager do?
medium- A.Continue with the current plan and adjust the budget in the next stage
- B.Close the project immediately
- ✓ C.Issue an Exception Report to the Project Board
- D.Reduce the scope to stay within budget without informing the Board
Why C: Management by exception dictates that when a tolerance is forecast to be exceeded, the Project Manager must escalate to the Project Board via an Exception Report. Continuing without escalation is not allowed.
Variation 8. A project is forecast to exceed its cost tolerance. What should the Project Manager do?
hard- A.Continue with the current Stage Plan and report the cost overrun in the next Highlight Report
- ✓ B.Raise an Exception Report to the Project Board and await their direction before proceeding
- C.Close the project immediately as the Business Case is no longer viable
- D.Increase the project budget to absorb the additional cost and continue with the current Stage Plan
Why B: When a tolerance is forecast to be exceeded, the Project Manager must escalate to the Project Board via an Exception Report. This is the principle of management by exception.
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Last reviewed: Jun 21, 2026
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