PRINCE2F Business Case and Organizing Practice Question
You are the project manager for a software development project. The business case shows a net present value (NPV) of $200,000 with a payback period of 18 months. During the initiating stage, the senior supplier informs you that the cost of a key component has increased by 20%, which will reduce the NPV to $50,000 and extend the payback period to 24 months. The project board is not scheduled to meet for another month. What should you do?
⚠ Common exam trap
PeopleCert often tests the misconception that the project manager can autonomously adjust the business case or scope to fix issues, when in fact PRINCE2 mandates escalation to the project board for any significant deviation from the approved plan.
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
✓
Request an extraordinary meeting of the project board to discuss the revised business case
PRINCE2 requires that any change to the business case, especially one that significantly reduces NPV and extends payback period, must be escalated to the project board for a decision. As project manager, you cannot unilaterally update the business case or change scope; you must request an extraordinary meeting to present the revised business case and seek approval to continue. This aligns with the 'continued business justification' principle and the 'manage by stages' theme.
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 an extraordinary meeting of the project board to discuss the revised business case
Why this is correct
Correct: escalate immediately for decision.
- ✗
Update the business case with the new figures and continue with the project
Why it's wrong here
The business case must be approved by the board; unauthorized changes are not allowed.
- ✗
Reduce project scope to bring costs back in line with the original business case
Why it's wrong here
Scope changes require board approval.
- ✗
Wait for the next scheduled board meeting to present the changes
Why it's wrong here
Delaying could lead to wasted effort; immediate escalation is needed.
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Same concept, more angles
2 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 a project, the cost-benefit ratio becomes unfavorable. What is the first action the project manager should take?
hard- A.Update the Business Case without informing the board
- B.Reduce project scope to cut costs
- C.Stop the project immediately
- ✓ D.Request a formal review of the Business Case by the project board
Why D: In PRINCE2, the Business Case is the key document for justifying the project's continued viability. When the cost-benefit ratio becomes unfavorable, the project manager must escalate this issue to the project board, which holds the authority to approve changes to the Business Case or decide on project continuation. Option D is correct because the project manager's first action is to request a formal review by the project board, as per the 'continued business justification' principle and the 'manage by stages' theme.
Variation 2. During a project, the senior user requests a change that significantly increases benefits but also increases costs. What should the project manager do first?
hard- A.Implement the change immediately to realize benefits quickly
- B.Update the Business Case and proceed without approval
- C.Reject the change because it increases costs
- ✓ D.Assess the impact on the Business Case and submit a change request to the project board
Why D: In PRINCE2, any change that impacts the Business Case must be formally assessed before action is taken. The project manager's first responsibility is to evaluate the change's effect on the Business Case (costs vs. benefits) and then submit a formal change request to the Project Board, which holds authority for approving changes that alter the project's justification. Option D aligns with the 'manage by stages' and 'continued business justification' principles.
JA
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.