Important projects in the portfolio backlog need delivery and budget estimates are required for prioritization. How should project budgets be estimated?

The correct approach involves decomposing the project into smaller, manageable features. The team, being closest to the work, then estimates the effort required for these features. This effort, combined with the team's velocity (the rate at which they complete work), allows for a more accurate and bottom-up budget estimate. This method leverages the team's expertise and provides a realistic basis for prioritization. Incorrect options: Relying solely on the experience of the sponsor, product owner, and team facilitator without detailed team input is a top-down approach that often lacks accuracy. While historical data is valuable, the team facilitator alone cannot derive a precise estimate without direct team involvement in breaking down the work. The product owner gathers details, but the team itself should provide the estimate, not the product owner on their behalf, as the team is responsible for the delivery.