This is the most serious risk of inadequate systems development life cycle methodolgy.
The following answers are incorrect because :
The project will be completed late is incorrect as it is not most devastating as the above answer.
The project will exceed the cost estimates is also incorrect when compared to the above correct answer.
The project will be incompatible with existing systems is also incorrect when compared to the above correct answer.
Reference: Information Systems Audit and Control Association, Certified Information Systems Auditor 2002 review manual, chapter 6: Business Application System Development, Acquisition, Implementation and Maintenance (page 290).