Finance — Mixed Practice — Part 5: 37 MCQs with Explanations
37 exam-level finance — mixed practice MCQs with answers and explanations for FPSC, PPSC, NTS preparation.
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Exam-Level FPSC PPSC NTS CSS
Last updated: Oct 13, 2026
37
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Q1 of 37
Payment divided by par value is classified as______________?
Correct Answer: Option B — Coupon payment
Detailed Academic Explanation:
Payment divided by par value is classified as Coupon payment .
💡 Key Conceptual Anchor:
Finance — Mixed Practice
Q2 of 37
An uncovered cost at start of year is $200, full cash flow during recovery year is $400 and prior years to full recovery is 3 then payback would be__________?
Correct Answer: Option B — 3.5 years
Detailed Academic Explanation:
An uncovered cost at start of year is $200, full cash flow during recovery year is $400 and prior years to full recovery is 3 then payback would be 3.5 years .
💡 Key Conceptual Anchor:
Finance — Mixed Practice
Q3 of 37
Present value of future cash flows is divided by an initial cost of project to calculate_______?
Correct Answer: Option D — Profitability index
Detailed Academic Explanation:
Present value of future cash flows is divided by an initial cost of project to calculate Profitability index .
💡 Key Conceptual Anchor:
Finance — Mixed Practice
Q4 of 37
First step in calculation of net present value is to find out_________?
Correct Answer: Option C — Present value cash flow
Detailed Academic Explanation:
First step in calculation of net present value is to find out Present value cash flow .
💡 Key Conceptual Anchor:
Finance — Mixed Practice
Q5 of 37
Life that maximizes net present value of an asset is classified as__________?
Correct Answer: Option C — Economic life
Detailed Academic Explanation:
Life that maximizes net present value of an asset is classified as Economic life .
💡 Key Conceptual Anchor:
Finance — Mixed Practice
Q6 of 37
In estimating value of cash flows, compounded future value is classified as its__________?
Correct Answer: Option A — Terminal value
Detailed Academic Explanation:
In estimating value of cash flows, compounded future value is classified as its Terminal value .
💡 Key Conceptual Anchor:
Finance — Mixed Practice
Q7 of 37
If two independent projects having hurdle rate, then both projects should________?
Correct Answer: Option A — Be accepted
Detailed Academic Explanation:
If two independent projects having hurdle rate, then both projects should Be accepted .
💡 Key Conceptual Anchor:
Finance — Mixed Practice
Q8 of 37
Cash flow which starts negative than positive then again positive cash flow is classified as__________?
Correct Answer: Option C — Non-normal cash flow
Detailed Academic Explanation:
Cash flow which starts negative than positive then again positive cash flow is classified as Non-normal cash flow .
💡 Key Conceptual Anchor:
Finance — Mixed Practice
Q9 of 37
Cash inflows are revenues of project and are represented by__________?
Correct Answer: Option D — Positive numbers
Detailed Academic Explanation:
Cash inflows are revenues of project and are represented by Positive numbers .
💡 Key Conceptual Anchor:
Finance — Mixed Practice
Q10 of 37
Net present value, profitability index, payback and discounted payback are methods to______________?
Correct Answer: Option B — Evaluate projects
Detailed Academic Explanation:
Net present value, profitability index, payback and discounted payback are methods to Evaluate projects .
💡 Key Conceptual Anchor:
Finance — Mixed Practice
Q11 of 37
A type of project whose cash flows would not depend on each other is classified as______________?
Correct Answer: Option B — Independent projects
Detailed Academic Explanation:
A type of project whose cash flows would not depend on each other is classified as Independent projects .
💡 Key Conceptual Anchor:
Finance — Mixed Practice
Q12 of 37
In mutually exclusive projects, project which is selected for comparison with others must have____________?
Correct Answer: Option A — Higher net present value
Detailed Academic Explanation:
In mutually exclusive projects, project which is selected for comparison with others must have Higher net present value .
💡 Key Conceptual Anchor:
Finance — Mixed Practice
Q13 of 37
Price earning ratio and price by cash flow ratio are classified as___________?
Correct Answer: Option D — Market value ratios
Detailed Academic Explanation:
Price earning ratio and price by cash flow ratio are classified as Market value ratios .
💡 Key Conceptual Anchor:
Finance — Mixed Practice
Q14 of 37
High price to earning ratio shows companys_____________?
Correct Answer: Option C — High growth prospect
Detailed Academic Explanation:
High price to earning ratio shows companys High growth prospect .
💡 Key Conceptual Anchor:
Finance — Mixed Practice
Q15 of 37
Process of comparing company results with other leading firms is considered as____________?
Correct Answer: Option C — Bench marking
Detailed Academic Explanation:
Process of comparing company results with other leading firms is considered as Bench marking .
💡 Key Conceptual Anchor:
Finance — Mixed Practice
Q16 of 37
An equity multiplier is multiplied to return on assets to calculate_________?
Correct Answer: Option A — Return on assets
Detailed Academic Explanation:
An equity multiplier is multiplied to return on assets to calculate Return on assets .
💡 Key Conceptual Anchor:
Finance — Mixed Practice
Q17 of 37
Company low earning power and high interest cost cause financial changes which have_____________?
Correct Answer: Option B — High return on assets
Detailed Academic Explanation:
Company low earning power and high interest cost cause financial changes which have High return on assets .
💡 Key Conceptual Anchor:
Finance — Mixed Practice
Q18 of 37
A point where profile of net present value crosses horizontal axis at plotted graph indicates project____________________?
Correct Answer: Option C — Internal rate of return
Detailed Academic Explanation:
A point where profile of net present value crosses horizontal axis at plotted graph indicates project Internal rate of return .
💡 Key Conceptual Anchor:
Finance — Mixed Practice
Q19 of 37
Profit margin multiply assets turnover multiply equity multiplier is used to calculate____________?
Correct Answer: Option D — Return on equity
Detailed Academic Explanation:
Profit margin multiply assets turnover multiply equity multiplier is used to calculate Return on equity .
💡 Key Conceptual Anchor:
Finance — Mixed Practice
Q20 of 37
An equation in which total assets are multiplied to profit margin is classified as_____________?
Correct Answer: Option A — Du DuPont equation
Detailed Academic Explanation:
An equation in which total assets are multiplied to profit margin is classified as Du DuPont equation .
💡 Key Conceptual Anchor:
Finance — Mixed Practice
Q21 of 37
Total assets divided common equity is a formula uses for calculating___________?
Correct Answer: Option A — Equity multiplier
Detailed Academic Explanation:
Total assets divided common equity is a formula uses for calculating Equity multiplier .
💡 Key Conceptual Anchor:
Finance — Mixed Practice
Q22 of 37
Price per share divided by earnings per share is formula for calculating_________?
Correct Answer: Option A — Price earnings ratio
Detailed Academic Explanation:
Price per share divided by earnings per share is formula for calculating Price earnings ratio .
💡 Key Conceptual Anchor:
Finance — Mixed Practice
Q23 of 37
In independent projects evaluation, results of internal rate of return and net present value lead to_____________?
Correct Answer: Option C — Same decisions
Detailed Academic Explanation:
In independent projects evaluation, results of internal rate of return and net present value lead to Same decisions .
💡 Key Conceptual Anchor:
Finance — Mixed Practice
Q24 of 37
Full Form of BCCI?
Correct Answer: Option C — Bank of Credit and Commerce International
Detailed Academic Explanation:
Bank of Credit and Commerce International is the correct answer to “Full Form of BCCI”. Items of this type are drawn from the Finance — Mixed Practice — Part 5 syllabus of Pakistani competitive exams, where the fact is tested verbatim.
💡 Key Conceptual Anchor:
Finance — Mixed Practice
Q25 of 37
Rule of 72 as a short cut method is explained by the formula:
Correct Answer: Option A — 72 divided by the annual interest rate
Detailed Academic Explanation:
72 divided by the annual interest rate is the correct answer to “Rule of 72 as a short cut method is explained by the formula:”. Items of this type are drawn from the Finance — Mixed Practice — Part 5 syllabus of Pakistani competitive exams, where the fact is tested verbatim.
💡 Key Conceptual Anchor:
Finance — Mixed Practice
Q26 of 37
Net income available to stockholders is $125 and total assets are $1,096 then return on common equity would be________?
Correct Answer: Option B — 11.40%
Detailed Academic Explanation:
Net income available to stockholders is $125 and total assets are $1,096 then return on common equity would be 11.40% .
💡 Key Conceptual Anchor:
Finance — Mixed Practice
Q27 of 37
Formula such as net income available for common stockholders divided by total assets is used to calculate__________________________?
Correct Answer: Option A — Return on total assets
Detailed Academic Explanation:
Formula such as net income available for common stockholders divided by total assets is used to calculate Return on total assets .
💡 Key Conceptual Anchor:
Finance — Mixed Practice
Q28 of 37
Price per ratio is divided by cash flow per share ratio which is used for calculating___________?
Correct Answer: Option D — Price to cash flow ratio
Detailed Academic Explanation:
Price per ratio is divided by cash flow per share ratio which is used for calculating Price to cash flow ratio .
💡 Key Conceptual Anchor:
Finance — Mixed Practice
Q29 of 37
A techniques uses to identify financial statements trends are included____________?
Correct Answer: Option D — Both A and B
Detailed Academic Explanation:
A techniques uses to identify financial statements trends are included Both A and B .
💡 Key Conceptual Anchor:
Finance — Mixed Practice
Q30 of 37
Companies that help to set benchmarks are classified as__________?
Correct Answer: Option B — Benchmark companies
Detailed Academic Explanation:
Companies that help to set benchmarks are classified as Benchmark companies .
💡 Key Conceptual Anchor:
Finance — Mixed Practice
Q31 of 37
The effect of purchasing power or inflation on present value is important because _________?
Correct Answer: Option B — It reduces the real value of cash flows received in the future
Detailed Academic Explanation:
The effect of purchasing power or inflation on present value is important because It reduces the real value of cash flows received in the future .
💡 Key Conceptual Anchor:
Finance — Mixed Practice
Q32 of 37
An Asset is __________?
Correct Answer: Option B — Use of funds
Detailed Academic Explanation:
An Asset is Use of funds .
💡 Key Conceptual Anchor:
Finance — Mixed Practice
Q33 of 37
If a company revaluates its fixed assets, the current ratio of the company will:
Correct Answer: Option B — Remain unaffected
Detailed Academic Explanation:
Remain unaffected is the correct answer to “If a company revaluates its fixed assets, the current ratio of the company will:”. Items of this type are drawn from the Finance — Mixed Practice — Part 5 syllabus of Pakistani competitive exams, where the fact is tested verbatim.
💡 Key Conceptual Anchor:
Finance — Mixed Practice
Q34 of 37
If we were studying a sample of 100 students and their examination performance and if the standard deviation of the list of results was say 14, then we could calculated the standard error by ___________?
Correct Answer: Option D — We cannot calculate standard error on account of inadequacy of information
Detailed Academic Explanation:
If we were studying a sample of 100 students and their examination performance and if the standard deviation of the list of results was say 14, then we could calculated the standard error by We cannot calculate standard error on account of inadequacy of information .
💡 Key Conceptual Anchor:
Finance — Mixed Practice
Q35 of 37
A firm reports total liabilities of Rs. 300,000 and owners equity of Rs. 500,000. What would be the total worth of the firms assets?
Correct Answer: Option C — Rs. 800,000
Detailed Academic Explanation:
Rs. 800,000 is the correct answer to “A firm reports total liabilities of Rs. 300,000 and owners equity of Rs. 500,000. What would be the total worth of the firms assets”. Items of this type are drawn from the Finance — Mixed Practice — Part 5 syllabus of Pakistani competitive exams, where the fact is tested verbatim.
💡 Key Conceptual Anchor:
Finance — Mixed Practice
Q36 of 37
If you have Rs. 850 and you plan to save it for 4 years with an interest rate of 10%, what will be the future value of your savings?
Correct Answer: Option B — Rs. 1,244
Detailed Academic Explanation:
Rs. 1,244 is the correct answer to “If you have Rs. 850 and you plan to save it for 4 years with an interest rate of 10%, what will be the future value of your savings”. Items of this type are drawn from the Finance — Mixed Practice — Part 5 syllabus of Pakistani competitive exams, where the fact is tested verbatim.
💡 Key Conceptual Anchor:
Finance — Mixed Practice
Q37 of 37
In case of international business which of the given factor(s) must be considered?
Correct Answer: Option D — All of the given options
Detailed Academic Explanation:
All of the given options is the correct answer to “In case of international business which of the given factor(s) must be considered”. Items of this type are drawn from the Finance — Mixed Practice — Part 5 syllabus of Pakistani competitive exams, where the fact is tested verbatim.
💡 Key Conceptual Anchor:
Finance — Mixed Practice
💡 How to Use These MCQs
Self-Assessment: Test your current knowledge level before studying.
Learning Aid: Read explanations carefully to understand concepts, not just memorize answers.
Revision Tool: Review these questions periodically before exams.
Time Management: Practice answering within time limits to improve speed.