A budget cut will affect the cost estimation of a project because if in development stages of a product the budget is cut the project team has to reanalyze the scope of the project. Project managers will need to remain calm so that the project team does not panic. Then they need to present the project to the business to show how the project fits the business strategy and inform them that the project will be successful after managing the cost. The project manager will find out what the business can afford for the project and communicate with the project sponsor. The project manager will need to review the requirements of the project and prioritize them according to the new budget. Eliminate the requirements which are not a priority and try to come up with more efficient ways to get the outputs that are desired. The project manager will present the new scope to the senior management team and communicate with the project team the modified requirements which were approved.