Final answer:
While traditionally a co-located team is seen as ideal for Agile development, the necessity may vary in the modern context with technology enabling effective distributed teams. Hence, the answer is D) 'Depends on the project.'
Step-by-step explanation:
The question pertains to whether a co-located Agile team is a key component of Agile development. In traditional Agile methodologies, having a co-located team is often considered ideal because it facilitates better communication, collaboration, and quick problem-solving among team members.
However, with advances in technology and an increase in remote and distributed teams, it is not necessarily required for Agile success if the right practices, tools, and team culture are in place.
Thus, while historically true, the modern Agile environment can accommodate distributed teams effectively.
Therefore, the best answer to this question would be D) Depends on the project, as the necessity of a co-located team for Agile development may vary based on the specific conditions and capabilities of the project and organization.