Final answer:
The project manager's task of identifying and acting to minimize financial risks is known as cost control, an essential part of effective budget management and a fundamental component of successful project management.
Step-by-step explanation:
When a project manager proactively identifies factors that may impact expenses and takes action to minimize the budgetary impact of these factors, this task is called cost control. Cost control involves monitoring project expenditures and managing changes to the project budget. It ensures that the project does not exceed the budget and that resources are allocated efficiently. It encompasses assessing potential risks and uncertainties, as well as putting measures into place to avoid cost overruns. A good budget is instrumental in helping to keep track of income and expenses, identify wasteful expenditures, and support achieving financial goals. A budget does not have to be restrictive but should be viewed as a financial plan that allows for informed decision-making and forward planning. The budget constraint framework reinforces the idea that decisions should focus on future choices and not be impacted by sunk costs, which are past and unrecoverable expenses.