Within Agile Foundation guidance and PRINCE2 Agile alignment, the Definition of Done (DoD) plays a critical role in supporting an iterative approach to delivery, making option C the correct answer. PRINCE2 Agile combines the governance strengths of PRINCE2 with the flexibility of Agile delivery, and iteration is central to how value is delivered incrementally. The DoD provides a shared and consistent understanding of what it means for work to be complete at the end of each iteration.

The iterative approach in PRINCE2 Agile relies on delivering small, usable increments frequently. The Definition of Done ensures that every increment meets agreed quality standards before it is considered complete. This supports transparency, predictability, and trust, which are essential for iterative delivery. Without a clear DoD, teams risk producing partially finished work that cannot be reviewed, tested, or released, undermining the benefits of iteration.

Option A is incorrect because Agile and PRINCE2 Agile emphasize continuous feedback as a core mechanism for learning and adaptation. Option B, offering predictive insights, is not a defining element of PRINCE2 Agile’s iterative approach; Agile focuses more on empirical feedback than prediction. Option D is also incorrect because frequent testing is encouraged, not reduced, in iterative Agile delivery.

Agile Foundation documents emphasize that the DoD acts as a quality gate that supports incremental progress while maintaining control. It aligns delivery teams and stakeholders on expectations and ensures that each iteration produces a potentially usable output. In PRINCE2 Agile, this alignment allows teams to work autonomously within defined tolerances while still meeting governance and assurance requirements. By clearly defining what “done” means, the DoD strengthens the iterative cycle of build, review, learn, and adapt, which is fundamental to Agile and PRINCE2 Agile working together.