Correct Answer:
A. 1.5
PI = PV of future cash flows / initial investment = 150,000 / 100,000 = 1.5.
November 13, 2026 · Accounting and Finance MCQs, Financial Management & Analysis MCQs
The present value of future cash flows is Rs. 150,000 and the initial investment is Rs. 100,000. The profitability index is:
Related MCQs
The three categories of activities in a statement of cash flows are:
A.
Revenue, expenses and profit
B.
Operating, investing and financing
C.
Current, non-current and contingent
D.
Direct, indirect and mixed
Correct answer is:
B. Operating, investing and financing
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Net profit is Rs. 50,000 and sales are Rs. 400,000. The net profit margin is:
A.
8%
B.
20%
C.
12.5%
D.
125%
Correct answer is:
C. 12.5%
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The materiality concept means that:
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All items must be recorded individually regardless of size
B.
Only material assets are depreciated
C.
Insignificant items need not be accounted for in strict detail
D.
Only large companies keep accounts
Correct answer is:
C. Insignificant items need not be accounted for in strict detail
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State-owned enterprises (SOEs) in Pakistan are typically audited by:
A.
Only by their own accountants
B.
Only by tax inspectors
C.
Only by the police
D.
Chartered accountant firms appointed under law, and may also be subject to audit by the Auditor-General
Correct answer is:
D. Chartered accountant firms appointed under law, and may also be subject to audit by the Auditor-General
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Fixed costs are Rs. 90,000 and the contribution margin ratio is 30%. The break-even sales value is:
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Rs. 270,000
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Correct answer is:
B. Rs. 300,000
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The management assertion of completeness means that:
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All recorded transactions actually occurred
B.
All transactions and balances that should have been recorded have been recorded
C.
All assets are owned by the entity
D.
All items are stated at fair value
Correct answer is:
B. All transactions and balances that should have been recorded have been recorded
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